Melco Resorts Philippines pledges to obey stock market rules
Melco Resorts and Entertainment (Philippines) Corp says it is pointless speculating if a current tender offer for its stock will shrink the proportion of its shares held by the public below the 10-percent threshold required by Philippine law.
The Philippine Stock Exchange asked the company on Tuesday what it would do if the proportion of its stock held by the public fell below the required minimum as a result of the tender offer made by MCO (Philippines) Investments Ltd – the firm’s majority shareholder – for publicly held shares in the company.
“It is speculative, at this time, to consider whether Melco Resorts Philippines will fall below the minimum public ownership requirement as a result of the tender offer conducted by MCO Investments,” Melco Resorts Philippines replied in a statement on Wednesday. “For this to occur, more than 60 percent of the Melco Resorts Philippines shares not currently held by MCO Investments would need to be tendered.”
The note from Melco Resorts Philippines also sought to reassure the stock exchange and minority shareholders. “Throughout the tender offer period, the company will closely coordinate with MCO Investments to continuously monitor the number of shares being tendered pursuant to the voluntary tender offer,” the company said.
“Melco Resorts Philippines shall apprise and consult with the Philippine Stock Exchange about the steps it may take if compliance with the public ownership becomes an issue,” it added.
Melco Resorts Philippines runs the City of Dreams Manila casino resort (pictured) and had asked to delist the company from the Manila exchange in September.
The company cited ongoing costs and the inability to raise capital as its justification. But it withdrew the delisting plan earlier this week, but now says it intends to buy the outstanding shares – up to 1.57 billion common shares that represent 27.23 percent of outstanding capital stock – by tender beginning next Wednesday.
MCO Investments is a subsidiary of Melco Resorts and Entertainment Ltd, an investor in Asian casinos, and owns about 3.95 billion shares in Melco Resorts Philippines.
MCO Investments says the switch from a full delisting to buying back the outstanding shares will increase its ability to deliver future business plans. Management also expects to reshape the Philippine operations once the tender deal is complete, saying it plans a “quasi-reorganisation” which has not yet been decided on.
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