Melco Crown considers buying out hedge fund partners in Studio City

Thursday 18th of February 2016

Melco Crown says it expects to buy out minority hedge fund partners in its Studio City complex, but is mindful of the reaction of shareholders, local media reports.

Melco Crown chief executive Lawrence Ho told investors at its first-half results that it was to look into a buyout of Studio City so it could assume 100 percent control, but was mindful of shareholders including Crown which owns 34 percent of Melco.

"we need to be fair to Melco Crown Entertainment shareholders as well. In due course, if there is a conversation to be had with the minority shareholders at Studio City, we're always happy to have it. But bearing in mind that valuation is our No.1 concern,” said the Melco Crown chief.

Studio City is said to be 60 percent owned by Melco, with the remaining shares held by hedge funds Silver Point Capital and Oaktree Capital Management. The potential buyout deal for Studio City could be worth US$ 1 billion, according to Bernstein.

"In the medium-term, we believe a potential buyout of the 40 per cent minority interest in Studio City remains the most significant company-specific upside catalyst for Melco Crown," said Bernstein.

Mergers & Acquisitions Bricks & Mortar Buyout Hedge fund