Bloomberry Resorts Corporation, owner and operator of Solaire Resort & Casino in Manila’s Entertainment City, has submitted a bid to purchase 16 hectares of land on which its flagship integrated resort is located.
In a filing to the Philippine Stock Exchange, Bloomberry said it had 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 two parcels of land currently owned by Pagcor and 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.
The company’s move follows an announcement by Pagcor in November that it was putting the land up for auction, with all bids to be received by 27 November 2017. After the bidding failed due to no bids being submitted, Pagcor announced in early January that it was launching a new auction for the land with bids due by last Friday 26 January 2018.
According to documents filed by Pagcor at the time, the two parcels of land cover a combined 160,359 square meters with a minimum asking price of Php37.23 billion (US$727 million). Pagcor also stipulated at the time that under the terms of the auction, SPI – whose current lease on the land runs through until 11 July 2033 – would be given last rights to match any bid to purchase the parcels.
“The properties are subject of a long-term lease initially in favor of Bloomberry Resorts and Hotels Inc. which built and operates the Solaire Resort and Casino. However, the leasehold rights were later assigned to Sureste Properties Inc. (lessee),” Pagcor said.
“The lessee has a right to match the highest complying bid for the properties.”
Pagcor has also 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.”
Bloomberry didn’t provide a reason for its bid, however Morgan Stanley analysts prophesized in November that any successful bid by Bloomberry could drive the company’s market value to a premium. They added that the Php37 million asking price represents around 30% of Bloomberry’s market value and would therefore come with a number of risks but that the saving of lease payments of Php250 million per annum until at least 2033 “is not material.”
