Melco Crown Entertainment Announces Melco's Deal To Buy Shares From Crown

(RTTNews) - Melco Crown Entertainment Limited (MPEL) said that its major shareholder, Melco Leisure & Entertainment Group Limited, a wholly owned subsidiary of Melco International Development Limited or "Melco", has entered into a privately negotiated agreement to acquire 198 million ordinary shares of the Company, or 13.42% of the current shares outstanding, from Crown Asia Investments Pty. Ltd. or "CAI", a wholly owned subsidiary of Crown Resorts Limited.

The aggregate purchase price is approximately US$1.2 billion, subject to upward adjustments for interest thereon if closing occurs after March 1, 2017.

Melco Leisure will pay a deposit of US$100 million that is refundable only if the sale and purchase agreement is terminated prior to closing due to Crown's default. The closing of the sale is conditional upon the receipt of Macau regulatory approval, Melco's financing arrangements and other customary closing conditions.

Subject to definitive agreement, Melco has secured a written commitment from a bank to provide the necessary financing for the purchase. Any such financing may require a pledge of the Company's ordinary shares or American depositary shares held by Melco Leisure as collateral. Upon closing of the sale, Melco's shareholding in the Company will increase from 37.89% currently to 51.31%.

In conjunction with this sale, Melco and Crown amended, with effect from the payment of the deposit, their shareholders' deed relating to the Company to provide for an increase in the nominees of Melco on the Company's board of directors from three to four, a decrease in the nominees of Crown from two to one, and the number of independent directors remaining at four. The amended shareholders' deed also provides that the Company's right to use "Crown" in its corporate name will terminate six months after the closing of the private sale.

James Packer, a Crown nominee director and our Deputy Chairman, will resign from the Company with effect from December 15, 2016 after payment of the deposit by Melco Leisure. The Company expects to appoint in due course a director nominated by Melco to fill the board vacancy in accordance with its corporate governance policies.

The company said it will not receive any proceeds from the Melco Acquisition.