Listed Resorts World Manila operator Travellers International Hotel Group Inc. will acquire Resorts World Bayshore City Inc. (RWBCI) for P16.15 billion.
RWBCI is the developer of the $1.1-billion Resorts World Bayshore within the Bagong Nayong Pilipino Entertainment City complex in Paranaque City.
Travellers said its board of directors on Tuesday approved its subscription to RWBCI’s 3.23 billion share issue consisting of 880 million common shares and 2.35 billion preferred shares. The share purchase translates to a 95-percent ownership in RWBCI.
In a disclosure to the Philippine Stock Exchange, Travellers said the share subscription costs a total of P16.15 billion at an agreed premium price of P5 per share.
Some P4.037 billion, or 25 percent, of the P16 billion acquisition cost has been settled by Travellers based on the minimum payment required by law. The transaction is still subject to Securities and Exchange Commission approval.
“The company’s board of directors decided to focus on the growth and development of its core business of gaming, leisure and entertainment, which necessitated the acquisition of the majority shares of RWBCI,” Travellers said.
The purchase of RWBCI shares led to an indefinite trading suspension of Travellers that started at 9:25 a.m. yesterday, September 24. Travellers was last traded at P9.03 per share.
With the acquisition, Travellers has appointed RWBCI as the main developer of the 31-hectare Resorts World Bayshore.
RWBCI is a co-licensee of Travellers in its provisional license with the Philippine Amusement and Gaming Corp. to develop the integrated resorts, casino and hotel complex.
Resorts World Bayshore will begin construction in December this year, and will open in 2018.
Phase 1, or development of an initial 16 hectares of the complex, will consist of four new hotel brands—Hotel Okura Manila, Westin Hotel Manila Bayshore, as well as the Genting Grand and Crockfords Tower under Genting Hong Kong Group—with more than 800 rooms, casino and window shops, and a Grand Opera House capable of seating more than 3,000, among others.
The whole development is seen to generate more than 1,500 hotel rooms upon completion.
Travellers reported a 25 percent year-on-year increase in first half net income to P2.9 billion driven by strong hotel occupancy rates at Maxims, Remington, and Marriott hotels within Resorts World Manila.
For 2014, the company has allotted P7 billion for capital expenditure to speed up Resorts World Manila’s Phase 2 and Phase 3 expansion, which would add 2,400 hotel rooms by 2017.
Phase Two involves expansion of the existing Marriott Hotel Manila with the construction of Marriott Grand Ballroom and additional rooms through the Marriott West Wing. The Grand Ballroom is set to open in March next year, while the Marriott West Wing will be operational by end-2015.
Phase Three consists of three hotels: Hilton Manila, Sheraton Hotel Manila and extension of Maxims Hotel. It also includes a new gaming area, additional retail space and six basement parking decks, all of which are to be finished before the fourth quarter of 2017.
Incorporated in 2009, Travellers International is primarily engaged in hotels, restaurants, leisure parks, entertainment centers and other related businesses including investments in casinos and other gaming activities.
The first complex to start operations at the Entertainment City was Solaire Resort & Casino of Bloomberry Resorts Corp., which opened in March last year.
Other facilities rising in the area are The Manila Bay Resorts of Tiger Resorts and Entertainment Inc. (a subsidiary of Japan-based Universal Entertainment Corp.) and the $680-million City of Dreams Manila by Melco Crown (Philippines) Resorts Corp. and Belle Corp.