Melco Resorts & Entertainment said Thursday it is evaluating “potential strategic alternatives” in relation to its Philippine integrated resort, City of Dreams Manila.
The company did not elaborate on what such strategic alternatives might be.
In a statement, Melco said it had engaged CBRE Capital Advisors, Inc and Moelis & Company LLC as financial advisors to assist in the process of exploring potential options for City of Dreams Manila, which is managed and operated by group subsidiary Melco Resorts Leisure (PHP) Corporation.
“No decision has been made regarding any strategic alternative and there can be no assurance that the exploration of potential strategic alternatives will result in any transaction,” the company said.
“Melco does not intend to comment on or provide updates in relation to this process unless and until it determines that further disclosure is appropriate or required.”
While Melco remains light on details, the move comes just weeks after Seaport Research Partners analyst Vitaly Umansky suggested in a note that the company should try to sell its interest in both City of Dreams Manila and its Cyprus resort City of Dreams Mediterranean in order to fund full acquisition of Macau’s Studio City and a potential Thai casino stake.
“Outside Macau, the Philippines (City of Dreams Manila) continues to generate cash but lacks real growth dynamics due to increasing Manila competition, while Cyprus has been a disappointment partly due [the conflicts in] Russia and Israel,” Umansky wrote.
“We remain of the view that Melco would be better off at this stage, with low valuation and high debt, to try to sell its Philippines and Cyprus assets and reallocate the capital.”
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