Melco Crown acquires equity interest in Macau Studio City
Under the terms of the agreement and related transaction documentation, Melco Crown will acquire from an affiliate of eSun Holdings Limited a 60 percent interest in the Cyber One Group, the developer of the Macau Studio City project. New Cotai Holdings will transfer to the Cyber One Group the shares of other entities that own the rights to develop and operate the casino to be located within the Macau Studio City project and retain its 40 percent indirect equity interest in the Cyber One Group.
Melco Crown will pay the affiliate of eSun $260 million for its 60 percent interest in the Cyber One Group, and will further pay New Cotai $100 million in cash in three installments over two years commencing upon the closing of the transactions.
Lawrence Ho, co-chairman and CEO of MCE, stated, "The proposed acquisition of a majority stake in the Macau Studio City project provides a unique opportunity for MCE to meaningfully increase its footprint in Macau. The property's theme and demographic focus are designed to be clearly differentiated from our existing portfolio of assets, as well as from our competitor's facilities in the market.”
Gabriel Chan, analyst at Credit Suisse in Hong Kong told Reuters that Melco's new project may delay Wynn Macau , MGM China and SJM Holdings from opening their scheduled properties on the Cotai strip. "I think they (Melco) will be able to start construction in the first or second half of next year, and open its doors in 2014. That means it will push the other potential new projects even further down the pipeline because of the labor shortage."