Interests controlled by Macau junket boss Levo Chan, chief executive of Tak Chun Group, are set to make a compulsory offer for roughly 29.2-percent of the shares of casino services and hotel firm Macau Legend Development Ltd. That follows the acquisition last week of a 20.65-percent stake in the latter company, which made Mr Chan the largest-single shareholder in Macau Legend.
The acquisition of the 20.65 percent holding means Mr Chan and entities controlled by him, are now acting in concert with other existing shareholders in Macau Legend, therefore representing in aggregate approximately 67.44 percent of the total issued share capital of the company, according to a Monday filing.
Under Hong Kong’s Takeovers Code, interests controlled by Mr Chan “will be required to make a mandatory unconditional cash offer” for all the issued shares of the firm, other than those already controlled by the stakeholder group that is acting in concert.
Shareholders should be notified of such a takeover offer within 21 days, added the filing by Macau Legend.
Macau Legend runs three casinos in Macau under a so-called services agreement with Macau licensee SJM Holdings Ltd, and has also invested in a Laos casino resort.
Last week it emerged that former Macau legislator David Chow Kam Fai and former banker Sheldon Trainor had dramatically reduced their shareholdings in Macau Legend, as part of a deal that saw Mr Chan’s interests become the largest-single stakeholder.
Monday’s filing from Macau Legend said interests controlled by Mr Chan would be offering HKD1.05 (US$0.1355) per share under the mandatory offer. The 32.6-percent stake not controlled by the group acting in concert is equivalent to just below 2.02 billion shares in Macau Legend.
But a 3.37-percent stake in Macau Legend is controlled by a unit of SJM Holdings, which has an agreement with the parties linked to Mr Chan not to accept the offer with respect to the shares it holds. As such, the offer will be for a stake of 29.09 percent held by other public shareholders of Macau Legend, plus 0.11 percent controlled by a non-executive director of the company, according to the latest filing.
The firm had just over 6.20 billion issued shares – and no outstanding options, derivatives, warrants or securities that could be converted into shares.
Mr Chan – officially Chan Weng Lin – has already spent about US$173 million, acquiring about 1.28 billion shares.
Monday’s filing stated that at the conclusion of a further mandatory offer, the offeror “intends to maintain the listing of the shares on the main board of the Stock Exchange”.
It added Macau Legend had applied for – and been granted – a waiver from strict compliance with maintain a minimum 25 percent public float, and been permitted “a lower percentage of 19.04 percent upon listing of the shares”.
The firm said independent non-executive directors on Macau Legend’s board would make a recommendation to shareholders regarding acceptance of the terms of the mandatory offer. They would be advised by Altus Capital Ltd.
Mr Chow will continue to serve as co-chairman of Macau Legend and will become a non-executive director. Melinda Chan Mei Yi – Mr Chow’s wife – will continue to act as an executive director and the firm’s chief executive, according to a company statement.
Separately in a Monday press release, Macau Legend said it had obtained additional bank funds “for its operation and development in Macau and Hengqin”.
The press release said the company had obtained an additional HKD450 million funding as part of a HKD2.3-billion loan refinancing initiative with Luso International Banking Ltd and CMB Wing Lung Bank Ltd – Macau Branch.
“The new facility arrangement has improved the company’s debt structure, as well as strengthened the company’s cash flow position,” said Mr Chow, Macau Legend co-chairman and an executive director, as quoted in the document.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters