Starting May 15, Australian gaming group Crown Resorts will no longer have a stake in local gaming operator Melco Resorts & Entertainment Limited. Furthermore, ‘the joint venture arrangements for the Japan market’ between the two companies will be terminated, according to a press release from Melco yesterday.
In total, the group is putting up 165.3 million ordinary shares for offer and repurchase in order to achieve the goals, noting that ‘the offering will not have a dilutive effect on the Company’s shareholding’ and the weight of Melco International, the majority shareholder, ‘will remain at 51.2 per cent’, notes the release.
“This transaction brings to conclusion the world’s most successful global gaming partnership,” states Melco Chairman and CEO Lawrence Ho Lau Yung, referring to the group’s cooperation “in both good times and more challenging operating environments”. The CEO thanked both James Packer and Crown Resorts “for being a great friend and partner for the past decade”. The release notes that the only remaining nominee director from Crown, Robert Rankin, will resign as a non-executive director from the company.
The chairman of Melco points out that: “I made the strategic decision to terminate the joint venture arrangement and allow Melco to pursue Japan alone,” noting it “highlights our confidence in, and commitment to, identifying and evaluating new markets,” referring in particular to the group’s City of Dreams Manila, which Ho describes as “giving us exposure to the fastest growing gaming and entertainment market in the world”.
“I feel even more confident today of Melco’s prospects than I did a year ago when our Company completed the redemption of over US$800 million worth of shares from Crown Resorts in May 2016,” notes the chairman, adding “I firmly believe that Macau remains the best gaming market in the world and a great place to invest”.
The most recent share buyback was a US$1.2 billion repurchase in February, leading to Melco International gaining its majority owner status.