Melco Resorts and Entertainment (Phils.) Corp. (delisting)

...avoid, tutuluyan nila i-elist ito, di naman nakikinig sa minority yang mga yan eh

Melco Resorts’ stocks get boost before tender offer

IT remains unclear if City of Dreams Manila operator Melco Resorts and Entertainment (Philippines) Corp.would be delisted from the Philippine Stock Exchange (PSE), analysts said, more than a month after its announcement of a tender offer sent its shares soaring.

Melco withdrew its plan to delist on October 19 without an explanation, while maintaining that the tender offer for publicly held shares will push through.

After the listed resort operator postponed holding it on October 3 for amendments, the tender offer — 1.57 billion shares at P7.25 apiece — is set to start on October 31 and end 20 business days later.

If it buys back all its shares, Melco will still be forced to delist — an indication that its minimum public ownership fell below the 10-percent float requirement.

“Depende na lang kung mayroong hindi magpapa-buyback ng shares nila. Kasi pwedeng gawin ng investors [na] hindi nila ibenta (It depends on the investors if they would opt to sell their shares. There’s a possibility that they might not),” Eagle Equities research head Christopher John Mangun said.

Offering a possible reason for the buyback, Mangun said Melco might be gearing up to sell its stakes to a foreign investor.

He was puzzled that Melco’s stock trading volume rose by 33 percent to 14.38 million shares on September 18 — the day it announced the offer — compared with 9.67 million the day before.

 “Hindi ko rin gets [kung] bakit may bumibili nito Usually naman…kapag ganyan, wala nang upside (I can’t understand why it is being bought.Usually in this case, there’s no upside anymore),” Mangun said.

Investors, he said, would only earn almost 1 percent should they sell their shares if they initially bought these at P7 each.

Melco snapped a four-day losing streak last Friday, gaining four centavos or 0.57 percent to close at P7.06 per share, alongside the 1.40-percent boost for the benchmark PSE index.

The latest amount is 23 percent below its year-to-date high of P9.17 on January 24, but 49 percent higher than the year-to-date low of P5.10 on July 9. It is down 10 percent year-to-date.

Mangun sees Melco’ stocks trading within its support level of P6.95-to-P7.10 range this week.

He found Melco’s withdrawal of its delisting plans a bit odd, saying there might be a “bigger picture” that the casino operator only sees.

Besides noting the volume boost, Philstocks Financial Inc. research associate Piper Chaucer Tan said the the firm’s stocks had been trading at the P7 level, higher than its previous supporting level — P6.10 — since the offer was announced.

Melco has been “noting major moves on the share prices,” he added.

According to Tan, the tender offer price is a double-edged sword.

“We want to look it at two sides…[I]t is not good to those investors who bought higher than P7.25 … but beneficial to those investors who bought lower than the tender offer price,” he said.

“I guess it would move sideways, unless there is a major disclosure, like [a] change of tender offer price or [another] amendment…to the tender-offer conditions,” the research associate added.

Given that Melco would not be forced to delist, First Grade Finance Managing Director Astro del Castillo said it could mean more options in the market for the investors.

This also could mean that Melco, as a listed company, would also find it “easier to get more capital either from…the stock market or other financial institution,” he said

Formerly known as Melco Crown Resorts Corp., the companyis is into developing and managing hotels, casinos, retail outlets and recreational facilities.

Its operating revenues dipped by 0.8 percent to P16.54 billion in the first half of 2018, due to the “adoption of new revenue standard [that imposed] higher commissions… to gaming promoters” which came from casino revenues, Melco said in a disclosure on July 31.

The casino operator’s net income of P354 million last year was a turnaround from 2016’s net loss, as gross revenues gained 40 percent on the back of stronger operations.

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...earnings report

Mixed results for Entertainment City’s casino operators

OPERATORS of integrated resorts and casinos along Entertainment City reported mixed results for the third quarter of 2018.

Melco Resorts and Entertainment (Philippines) Corp. (MRP) said net revenues went down by four percent to $141.7 million in the July to September period, versus $148.2 million recorded in the same period a year ago.

The operator of City of Dreams Manila said the decline was mostly due to a shift in accounting standards.

“The decrease in net revenue was primarily attributable to higher commissions reported as a reduction in revenue upon adoption of a new revenue recognition standard issued by the Financial Accounting Standards Board, partially offset by improved gross gaming revenues,” the company said.

Without the change in accounting standards, MRP said net revenues would have been at $167 million, around 13% higher from the same period a year ago.

Rolling chip volume reached $3 billion-unchanged from year-ago figures- with a win rate of 2.7%. Mass market table games generated $204.9 million, with a hold percentage of 32.4%. Meanwhile, gaming machine handle rose to $935 million, with a win rate of 5.3%, lower than 5.6% in the third quarter of 2017.
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