Ten years ago, Lawrence Ho, son of Macau casino magnate Stanley Ho, teamed up with Filipino billionaire Enrique Razon Jr. to create City of Dreams Manila (COD Manila), turning it into a dazzling new star in the Asian gaming industry. Today, ten years later, there are reports that Melco Resorts & Entertainment Ltd., led by Lawrence Ho, might partially or completely exit the Philippines, and is currently looking for new buyers for their stake in COD Manila.
(Recently, Lawrence Ho and key partners, PAGCOR and officials from the city government of Parañaque, posed for a photo at the 10th anniversary celebration of City of Dreams Manila)
Media reports indicate that during a conversation with analysts, Lawrence Ho revealed that Melco Resorts is considering a "light-asset" strategy and may exit the Philippine market. Subsequently, Melco Resorts issued an "ambiguous" announcement, stating that it is "exploring strategic alternatives" for handling the equity of COD Manila. This has led to speculation: Is Melco really planning to "withdraw"?
Belle Corp: No intention to acquire Melco shares, possibly due to high pricing?
If Melco Resorts ultimately decides to exit, the most likely buyer is considered to be Belle Corp, owned by the Razon family, which not only owns the land of COD Manila but also holds half of its operational rights through its subsidiary, Premium Leisure and Amusement Inc. (PLAI).
However, on March 4th, Belle Corp issued a statement to the Philippine Stock Exchange (PSE), clarifying that it has no plans to acquire Melco's stake in COD Manila. The statement noted: "We cannot confirm whether Melco will exit the Philippine market, but we can confirm that, in the foreseeable future, Belle Corp has no plans to acquire Melco's interest in COD Manila." It was reported that Melco had previously offered COD Manila at a high price of $1 billion, which Belle Corp considered too high and ultimately decided not to pursue the acquisition.
Currently, Melco is still looking for buyers and hopes that the new owner will retain its role as the operator of COD Manila. If no buyer is found, Melco expects to continue managing the resort until the contract expires.
Future direction: Gaming capital flows to Thailand, Philippines faces challenges?
Although the future of Melco Resorts in the Philippine market remains uncertain, its stock price has recently seen a strong rebound. On March 4th, Melco's stock price jumped before the opening of the US stock market, soaring from the previous day's closing price of $5.56 to $6.10, and finally closing at $5.90, with nearly 900,000 shares traded throughout the day. Some wonder why Melco is selling City of Dreams Manila?
Media reports suggest that a top gaming analyst advised Melco Resorts to sell its casino assets in the Philippines and Cyprus to fund its expansion plans in Macau and Thailand. Over the past decade, the Philippines has attracted significant investment with its relatively relaxed policies and large gaming market, becoming an important gaming hub in Asia.
However, in recent years, as Thailand progresses with the legalization of casinos, the capital flow in Southeast Asia's gaming industry is changing, with many investors shifting their focus from the Philippines to Thailand. Melco's adjustment is a reflection of this trend.
There are also concerns that if external capital like Melco's accelerates its withdrawal, the Philippine government may need to consider more measures on how to retain foreign investment. This issue will become increasingly critical in the coming years.
