City of Dreams Manila Evaluation Progressing, Reports Melco
** Posted on: May 9, 2025, 05:00h. Last updated on: May 9, 2025, 05:00h. **
Todd Shriber @etfgodfatherRead MoreFinancial Gaming Business Mergers and Acquisitions* Melco’s Progress in Selling City of Dreams Manila: Adopting a Leaner Strategy* No definite timeline for the official announcement
Melco Resorts & Entertainment (NASDAQ: MLCO) disclosed today that their ongoing strategic evaluation of City of Dreams Manila, the Philippines casino hotel operation, is making significant advancements.
During their first-quarter earnings conference call, Chief Financial Officer Geoff Davis alluded to these advancements when responding to a question from Citi analyst George Choi about an update on the Manila strategic review. In essence, Davis confirmed that they continue to engage potential buyers while they work through a series of questions within the virtual data room. As they whittle down the group to a shortlist, they'll proceed with the bidding process. Melco's advisors and the company itself will provide an update when something substantial comes to light.
In early February of this year, Melco announced it had recruited CBRE Capital Advisors, Inc. and Moelis & Company LLC as its financial advisors to assist in the examination of potential strategic alternatives for City of Dreams Manila[3]. While no casino operators have come forward regarding their interest in the Philippines integrated resort, the confidentiality agreements (NDAs) already executed by potential buyers suggest active interest.
Identifying the Allure of City of Dreams Manila
City of Dreams Manila could pique the interest of prospective buyers for several reasons. First and foremost, it has demonstrated profitability and operational success. However, it may not be Melco's most attractive long-term asset due to the limited growth drivers and burgeoning competition in the Manila market. With the potential of Thailand legalizing casino gaming and Japan contemplating the addition of two more integrated resorts, the market might become even more saturated.
For the first three months of 2025, City of Dreams Manila registered solid earnings before interest, taxes, depreciation, and amortization (EBITDA)[2]. However, these numbers saw a decline compared to the same period last year:
No whispers of divesting City of Dreams Mediterranean
In a related development, Melco hasn't hinted at the potential sale of its stake in City of Dreams Mediterranean, its casino hotel in Cyprus[4]. Despite the ongoing military conflicts in Europe and Israel, the property still experienced growth in property EBITDA for the first quarter of 2025. Vitaly Umansky, of Seaport Research Partners, previously recommended that Melco consider divesting its interests in its Cyprus and Philippines properties[4]. However, Lawrence Ho expressed optimism about the property's ability to deliver strong results during the rest of the year.
[1] strategic alternatives[2] earnings statement[3] financial advisors[4] Cyprus EBITDA[5] location
- The ongoing strategic evaluation of City of Dreams Manila by Melco Resorts & Entertainment involves discussions with potential buyers, with the goal of whittling down a group for the bidding process.
- The financial sector could be intrigued by Melco’s City of Dreams Manila, as it boasts profitability and operational success, despite being oversaturated in the Manila market with potential competition from upcoming integrated resorts in Thailand and Japan.
- Investing in Asia Pacific gaming is attracting interest, as demonstrated by Melco's ongoing strategic evaluation of its City of Dreams Manila operation.
- The business of mergers and acquisitions in the finance industry might see significant changes as a result of Melco's potential divestment from City of Dreams Manila and other real-estate ventures.
