Experts respond on Melco Crown split

JP Morgan Securities Australia Ltd said Melco Crown move would impact negatively on the industry.

Macau.- After Melco Resorts & Entertainment Ltd’s announcement about the end of its partnership with Crown Resorts, international experts have evaluated the possible impacts of the resolution. The dissolution of the twelve year old society, which operates in Macau, would change the upcoming businesses in the Chinese casino zone.

According to stock brokerage analysts from JP Morgan Securities Australia Ltd, the latest move is probably not right at this moment. The official report states: “The timing of the Melco Resorts exit is not ideal after earnings upgrades [of the latter firm].” The analysis was held by JP Morgan Securities Australia Ltd’s Donald Carducci, Shaun Cousins and Shalin Doshi.

As GGrasia added, yesterday’s note also confirms that first-quarter Melco Resort’s report resulted “in higher-than-forecast margins, strong rolling chip revenue and respectable mass [market] performance,” due to the stronger performance of the company during the first months of the year.

Melco Resorts & Entertainment Ltd is mainly selling 165.3 million shares as well as a concurrent repurchase of shares from Crown Resorts (according to Bernstein they represent around 11.2 of the MLCO’s total) which is expected to occur on May 15. Meanwhile, Crown Resorts would use the proceeds from the operation to restructure its financial situation and reduce its debt.