Solaire Resort operator Bloomberry Resorts Corp said Tuesday it has reached a settlement agreement in its decade-long legal battle with former partner Global Gaming Asset Management (GGAM) Philippines LLC.
Under the terms of the settlement, Bloomberry has agreed to buy back by way of a Special Book Sale the 921,184,056 shares in the company held by GGAM at a purchase price of Php18.32 per share, equating to a total purchase price of US$300 million. The deal, Bloomberry added, is contingent on the Regional Trial Court in Makati lifting a writ of preliminary injunction and attachment on GGAM’s shares, and the Philippine Depository and Trust Corp lifting all suspensions and restrictions on transactions in the shares.
The long-running dispute related to a Management Services Agreement signed between the companies prior to Solaire’s 2013 opening under which GGAM – the local unit of veteran casino executive William Weidner’s Las Vegas-based casino investment firm – was paid US$175,000 per month for the provision of technical services related to Solaire’s design, planning, layout and construction and of services around employee recruitment.
Bloomberry terminated the relationship six months after opening alleging GGAM Philippines had failed to deliver on the terms of the agreement and more specifically a promise to bring high-rollers to the property. It also cited concerns over the casino’s design and layout. GGAM sued for wrongful termination.
The new settlement deal, Bloomberry said Tuesday, covers all pending cases between the two parties, including cases in the Philippines, Nevada and Singapore.
In a note, Maybank Securities analyst Raffy Mendoza said the transaction would see Bloomberry’s free float decline by 8.1%pts to 29.1%but has maintained a “BUY” on the shares, “as the share price decline brought about by the GGAM settlement presents a buying opportunity at its current 2024E EV/EBITDA of 8x.”
