The CEO of Macau gaming promoter Tak Chun Group, Levo Chan, is expected to make a mandatory unconditional cash offer for all shares currently held by public shareholders of Macau Legend Development Ltd, potentially lifting his personal stake to around 49.94%.
The mandatory offer comes after Chan last week acquired a 20.65% interest in Macau Legend – lifting his stake to 20.75% – via his wholly-owned investment firm Perfect Achiever Group Ltd for a total consideration of HK$1.28 billion (US$165.2 million).
According to a Monday morning filing by Macau Legend, Perfect Achiever Group is required under Hong Kong’s Takeovers Code to make the offer for all publicly held shares, including 29.08% by unnamed shareholders and 0.11% by director Carl Tong Ka Wing.
However, the offer will not see Chan take ownership of interests currently held by key executives of the company, including founder and Chairman David Chow, CEO Melinda Chan, fellow directors Sheldon Trainer and Li Chi Keung, or Chow’s mother and former director, Madam Lam Fong Ngo. It also does not include the 3.37% stake held by SJM Holdings subsidiary Vast Field Investments Ltd – all of whom have already signed an undertaking not to dispose of their shares.
Instead, Macau Legend said in its filing that, with the exception of Vast Field Investments, Chan will now act in concert with the group, all together referred to as the Offeror Concert Party Group, which will represent a combined 67.44% of the total issued share capital of the company. Chan will also “become the leader of the Offeror Concert Party Group,” it said.
Should remaining shareholders all agree to sell their stake to Chan at the offer price of HK$1.05 per share, he would acquire an additional 1,809,896,655 shares for a total consideration of HK$1.90 billion (US$245.2 million).
Macau Legend said in its filing that Chan has no intention of making substantial changes to the existing operations of the company or to terminate employees, but that he would conduct a review on its operations and financial position “for the purpose of formulating business plans and strategies for the Group’s long-term business development and will explore other business opportunities for the Group.”
Chan will also seek to nominate three new directors to the board upon completion of the mandatory offer, with Donald Chow, Sheldon Trainer and Carl Tong all to step down.
David Chow and Melinda Chan will retain their roles as Chairman and CEO respectively.
Macau Legend operates casinos at Macau’s Legend Palace and Babylon under license from SJM, both located within the company’s Macau Fisherman’s Wharf precinct, as well as Savan Legend in Laos and a shopping complex in Hengqin.