Bloomberry launches $200M equity offering

Bloomberry Resorts Corp. of business tycoon Enrique Razon Jr. launched to selected institutional investors on Monday a $200-million equity offering to boost funds for a major hotel-casino project at Pagcor City.

The price range for the offering was set at P6 to P9 per share, equivalent to a ratio of enterprise value to earnings before interest, taxes, depreciation and appreciation (EV/Ebitda) of six to seven times, said a source present during Bloomberry’s meeting with select investors at Makati Shangril-La on Monday.

The offering will bring to public hands 10 to 13 percent of Bloomberry’s ownership. It will also bring the company’s market capitalization to nearly $2 billion (P86 billion), industry sources said.

As of Monday, Bloomberry’s stock prices fell by another 12.8 percent to P13.08 per share, giving it a market cap of P139 billion.

At a $2-billion market cap, a source from the gaming industry said Bloomberry would be reasonably priced. Unlike its peers, Belle Corp. and Alliance Global Group Inc., the source said Bloomberry was a pure gaming play and would directly benefit more from the cash flows of its casino, the first to open in Pagcor City.

In a disclosure to the Philippine Stock Exchange, Bloomberry said its board had approved an equity placement transaction where controlling shareholder Prime Metroline Holdings Inc. would offer and sell shares by private placement to qualified buyers under certain exemptions provided by the US Securities Law and the Securities Regulation Code of the Philippines.

Bloomberry held the meeting with selected institutional domestic investors on Monday to launch its re-IPO via a “top-up” offering scheme.

Under this scheme, Razon’s group, via Prime Metroline, will initially “lend” some of the shares it holds to Bloomberry for a quicker equity deal. Bloomberry will sell these shares, the proceeds of which will be used for the casino project.

Prime Metroline will buy the same number of primary shares that Bloomberry will issue at a later date.

The disclosure confirmed that Prime Metroline would subscribe to the new shares that Bloomberry will issue from its authorized but unissued shares.

CLSA Ltd. and UBS AG were mandated by Bloomberry as joint global coordinators, joint bookrunners and joint lead managers for the placing transaction. CLSA will serve as the “stabilization” agent.