Private Equity Firm Buys 20% of Galaxy Entertainment
[Galaxy Entertainment] said Permira would buy 452 million shares from Galaxy shareholder and mid-tier property firm K.Wah International Holdings for HK$3.8 billion, and another 323 million new shares from Galaxy for HK$2.7 billion. Galaxy will also sell 150 million new shares to institutional investors at HK$8.42-HK$8.82 apiece.
Total price tag: US$838M.
Permira, based in the UK with offices globally, is a partner in Birds Eye frozen foods, UK gaming operator Gala Coral Group, the UK version of AAA, UK Travelodge and a ton of other companies you've probably never heard of.
Galaxy Entertainment's stock is still sitting on HK$9.00 on the Hong Kong Stock Exchange, but you can bet it will start seeing some movement with this announcement. Trading of Galaxy Entertainment has been suspended until Tuesday because of the announcement.
What Goldman Sachs and UBS have to say:
Goldman Sachs said on Friday it has increased its target price for Galaxy Entertainment Group, a Macau-based operator of casinos and resorts, to 9.50 Hong Kong dollars from 8.60 dollars after British private equity firm Permira acquired a 20 percent stake in the company. Goldman expects Galaxy to benefit from the gaming industry experience that Permira will bring with it. Permira has already invested in Gala Coral Group, UK's third-largest casino operator. UBS Investment Research reiterated its "buy" rating on Galaxy with a target price of 9.50 dollars. UBS expects the "stronger balance sheet will help Galaxy Entertainment Group be better positioned to unlock its landbank."
When C.H. Uckmonster talks, people listen.