Philippines gaming regulator PAGCOR is calling for more offers for the “negotiated sale” of two parcels of land in Manila that house Solaire Resort & Casino – despite Solaire operator Bloomberry having submitted its own bid to buy the land in January.
The invitation, posted on PAGCOR’s corporate website, calls for potential offerers to submit their offer requirements on 17 April 2018 at 14:00.
PAGCOR originally announced its intention to sell the land, covering a combined 16 hectares in Manila’s Entertainment City precinct, via auction in November. After the bidding failed due to no bids being submitted, the regulator announced in early January that it was launching a new auction for the land with bids due by Friday 26 January 2018.
Bloomberry subsequently submitted a bid through its wholly-owned subsidiary Sureste Properties Inc (SPI) – which runs the hotel and non-gaming facilities at Solaire and is the lessee of the land – to acquire the two parcels of land where the resort and its expansion area is located. SPI also submitted an offer to purchase the land by negotiated sale should the bidding process fail.
Notably, this new call for offers stipulates that any offers will be assessed via negotiated sale as opposed to the previously mentioned auction process.
Despite PAGCOR re-advertising, Morgan Stanley analysts told IAG that they still expect Bloomberry to complete acquisition of the land, which is to be sold for a minimum of Php37.23 billion (US$727 million).
In a recent note, Morgan Stanley said that purchase of the land would save Bloomberry Php500 million (US$9.6 million) on current land rental but could lead net debt to rise to Php31 billion in 2018, declining to Php17 billion in 2019. The financial services firm added that interest expense could also rise to Php3.6 billion in 2018 and Php3.9 billion in 2019, lowering its net profit forecasts 23% and 30% respectively to Php7.7 billion and 7.9 billion.
According to PAGCOR documents, the two parcels of land cover a combined 160,359 square with Bloomberry holding lease rights through to 11 July 2033. PAGCOR has stipulated that the land must continue to be used “exclusively for the purpose for which it was intended … that it serves as an integral part of the PAGCOR Entertainment City Project and is to be utilized for the purpose of developing and maintaining thereon a world-class integrated resort in accordance with the plans approved by the lessee and PAGCOR.”
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