Australian mogul James Packer’s Crown Resorts has reduced its stake in Melco Crown Entertainment (MCE) from 34.3 per cent to 27.4 per cent for HK$6.2 billion, Hong Kong-based Melco International Development (Melco) announced Wednesday night.
According to the deal, MCE has agreed to repurchase 155 million shares from a Crown Resorts subsidiary called Crown Asia Investments (CAI). After the repurchase agreement, Melco’s stake will rise to 37.9 per cent from 34.3 per cent.
Melco Crown Entertainment (MCE) is an associate of Melco.
According to Wednesday night’s announcement, the aggregate purchase price for the share repurchase is US$800,838,500, equivalent to about HK$6.2 billion.
“Immediately following closing of the share repurchase the equity interests of Melco and public shareholders in MCE will be increased to approximately 37.9 per cent and 34.7 per cent respectively, while CAI’s equity interest in MCE will be reduced from 34.3 per cent to approximately 27.4 per cent.”
Accordingly, Melco will become the single largest shareholder of MCE.
Lawrence Ho Yau Lung, who chairs Melco, will be re-designated as MCE chairman, while Packer will step down as co-chairman. Before the deal announced was on Wednesday, both were co-chairmen of MCE. Ho will continue to be the executive director and CEO of MCE.
The announcement quoted Ho as saying that “this is a tremendous milestone for Melco.”
Meanwhile, MCE said in a separate statement Wednesday night that its net revenue for the first quarter rose by about 5 per cent to US$1.1 billion.
According to the statement, “the company’s strong operational and financial results were mainly attributable to the net revenue generated by Studio City in Cotai, which started operations in October 2015, and City of Dreams Manila, which commenced rolling chip operations in February 2015.”