Gokongwei, Okada groups fail to clinch deal on Manila Bay Resorts project

Kazuo Okada (left) AP file photo and John Gokongwei (photo by Nelson Matawaran): Scrapped casino talks

The groups of tycoon John Gokongwei and Japanese pachinko mogul Kazuo Okada have aborted discussions on a partnership for the latter’s Manila Bay Resorts, an integrated entertainment and resort project in Manila’s future gaming hub Entertainment City.

“Upon mutual agreement, Robinsons Land Corp. (RLC) and Universal Entertainment group have decided not to pursue discussions between them concerning the proposed development,” RLC said in a disclosure to the Philippine Stock Exchange on Wednesday. The share price of RLC tumbled 1.84 percent to close at P24 on the local bourse, bucking the overall market upswing, after the disclosure that the deal has collapsed.

RLC did not cite any reason for the failed partnership with Okada, who is being investigated in the United States for alleged violations of anti-bribery laws in relation to the $2-billion casino project in the Philippines. A statement issued by Universal Entertainment in Tokyo echoed RLC’s one-line message, suggesting the break-up was a mutual decision.

For lack of official explanation, market players could only speculate on the deal-breaker: An uncertain tax regime for Entertainment City gaming operators or the deepening probe by US authorities on Okada’s Asian ventures that might affect the local project.

It remains to be seen whether the Japanese group will get a new local partner following the collapse of discussions with the Gokongwei group. Among those earlier reported to be interested to tie up with the Japanese group is the Lopez family, which has a property development arm, Rockwell Land Corp.

In July last year, the Okada group also signed up tycoon Andrew Tan-led Empire East Land Holdings Inc. to build a P45-billion upscale residential condominium complex as a component of the $2-billion entertainment hub.

Gokongwei’s RLC earlier agreed to acquire a minority interest in the gaming facility to be operated by Tiger Resorts, Leisure and Entertainment Inc., a wholly owned unit of Okada’s Universal Entertainment. At the same time, RLC was supposed to acquire a majority stake in Eagle I Land Holdings Inc., the landowner of the project site.

The partnership with Okada would have given the Gokongwei group a foothold in Entertainment City even after the limited licenses had been awarded to four proponents. The other licensees in Entertainment City are tycoon Enrique Razon’s Bloomberry Resorts, the Melco Crown Entertainment-Belle Corp. group and the Andrew Tan-Genting group tandem. Only Bloomberry’s Solaire Manila is operational so far.

Originally posted at 03:31 pm | Wednesday, May 29, 2013