A significant shift is underway for DigiPlus Interactive Corp., the force behind popular platforms like BingoPlus and ArenaPlus. The company is setting its sights on a controlling stake in Hong Kong-listed International Entertainment Corp. (IEC), owner of the New Coast Hotel Manila, a bustling integrated hotel and casino.
DigiPlus intends to primarily fund this ambitious acquisition using its own accumulated resources. While confident in its financial standing, the company isn’t ruling out the possibility of securing short-term financing if needed, demonstrating a pragmatic approach to the deal.
The agreement centers around a HK$1.6 billion (approximately P12 billion) investment in convertible notes, structured in two phases. The initial HK$800 million tranche is poised for completion once standard conditions are met, with the remaining portion to follow within three months, contingent on agreed-upon terms.
The entire process, from initial payment to full conversion, is anticipated to span eight to nine weeks. However, this timeline hinges on crucial approvals – from IEC shareholders, the Securities and Futures Commission of Hong Kong, and the Hong Kong Stock Exchange.
The first payment is targeted for January, with the second slated for April. Simultaneously, DigiPlus must navigate the Philippine Competition Commission (PCC) approval process, a step that could extend the overall timeline by six to nine months, adding an element of uncertainty.
IEC’s New Coast Hotel Manila, formerly the New World Hotel Manila, is a substantial property boasting 96 gaming tables and 495 slot machines. This acquisition represents a strategic move for DigiPlus, aiming to bolster its presence within the Philippine gaming landscape.
DigiPlus executives believe the competitive intensity within the Entertainment City is increasing, potentially slowing growth. Positioning themselves in the Malate area, with its limited casino presence, offers a compelling opportunity for accelerated expansion.
The cost-effectiveness of entering the Malate market is a key driver. Acquiring a land-based casino in Entertainment City would demand a staggering investment – upwards of $1 billion – making the IEC deal a far more financially viable path to majority ownership.
While a dual listing on the Hong Kong Stock Exchange isn’t currently a priority, DigiPlus remains receptive to attracting international investment and evaluating the potential benefits of an overseas listing in the future.
Despite this significant investment, DigiPlus recently reported a net income attributable to the parent company of P1.71 billion for the third quarter, a decrease of 51% compared to the same period last year. Shares in the company experienced a slight dip, closing at P26.70 apiece.
