Melco Crown buys back stock from Crown Asia; Packer reduces stake by $800m
Melco Crown Entertainment has recently announced that it is buying back $800.83 million in company shares fromCrown Asia Investments it’s joint venture partner. The two Casino giants have jointly invested and managed several major properties throughout the region of Macau and Southeast Asia, in particular the City of Dreams Mega-Resorton the Cotai Strip.
Each share is valued at $5.166 or roughly $15.50 per American Depository Share, a 16 percent premium compared to the closing price on Tuesday.
Melco Crown Entertainment‘s American Depository Shares are inactive pre-bell and closed at $15.25 on Tuesday near the bottom of a range of $12.05 – $24.00 per share over the course of a year.
Melco will be repurchasing 155 million shares from Crown Asia, a department of Australia’s Crown Resorts operating Casinos throughout Asia. After the transaction has finalized, Crown Asia’s stake in Melco Crown Entertainment will be reduced from 34.4 percent to just 27.4 percent, a decrease of 7 percent in total. The share of Melco International Development will rise to 37.9 percent while the public shareholding will rise up to 34.7 percent.
Melco Crown, (also operating the Philippines located City of Dreams Manila Casino Resort) plans on paying the full purchase price using available liquid assets, and the repurchased shares will be cancelled in due time.
Australian Businessmen and Investor James Packer is planned to resign from his position as co-chairman as it stands after the transaction has finalized, and will become deputy chairman on the board of directors. Todd Nisbet, who is currently director of the board, will also be resigning. The board will from then on be made up of three Melco nominees and two Crown nominees, as well as two independents with CEO Lawrence Ho remaining chairmen of the board.
Crown’s Chairman Rob Rankin has been quoted in saying “Crown is strongly committed to remaining one of Melco Crown Entertainment’s major shareholders,” and goes on to say that “This transaction forms part of Crown’s ongoing capital management strategy.”
It is also noted that Melco intends to maintain its strong liquidity position, with over $1.2 billion of capacity on a revolving loan facility and $1 billion cash in land investments.