Gaming firm LRWC acquires 51% stake in Midas Hotel

Posted at 11/13/12 7:38 AM

MANILA, Philippines - Listed gaming firm Leisure & Resorts World Corp. (LRWC) has inked a deal to acquire a controlling 51-percent stake in the 240-room Midas Hotel and Casino along Roxas Blvd.

In a disclosure to the Philippine Stock Exchange, LRWC said the agreement was signed with Eco Leisure and Hospitality Holding Co. Inc., a holding firm of luxury island resort Misibay Bay owner Zaldy Co, and Hotel Enterprises of the Philippines (HEPI).

LRWC acquired the shares from Chinese-Filipino businessman Lucio Co, who owns the chain of Puregold supermarkets and upscale warehouse club S&R.

HEPI owns and operates the Midas Hotel, a boutique hotel with executive and deluxe rooms as well as three restaurants.

“The investment of the company is expected to strengthen and enhance the operations of the Midas Hotel and Casino,” LRWC said.

Sources earlier said the transaction could fetch at least P800 million.

The deal is expected to boost LRWC’s presence in the gambling business where it sees significant potential for long-term growth.

Aside from Midas Hotel, LRWC is also injecting P4 billion in capital to help fund a $1-billion integrated casino and resort on a reclaimed land along Manila Bay. The project is in partnership with Belle Corp. and Macau casino giant Melco Crown Entertainment Ltd.

In exchange for its investment, LRWC’s wholly-owned unit AB Leisure Global Inc. will get 30 percent of the fixed yearly income generated from the leasing of all commercial space in the project, inclusive of the hotel, retail and casino premises.

Aside from this, AB Leisure will be paid fees equivalent to a 30 percent of Belle’s 50-percent share of the EBITDA (earnings before interest, taxes, depreciation and amortization) from casino operations or 30 percent of Belle’s 15-percent share of the net win, whichever is higher, after deducting Belle’s royalty which is based on gross win.

The casino is targeted for opening in the first half of 2014. It forms part of a huge gambling development dubbed Entertainment City, which the government hopes will turn the Philippines into the world’s number two gaming destination, ahead of Las Vegas and Singapore.

Analysts said the casino project, once operational, will become a major driver of growth for LRWC, which operates bingo and other interactives games in the Cagayan Economic Zone.

Gambling revenues in Philippines are forecast to grow from $1.3 billion in 2011 to $3 billion in 2015 once four new resorts are completed.