Bloomberry Resorts Corp. has successfully resolved a decade-long legal dispute with casino management firm Global Gaming Philippines LLC (GGAM) through a $300-million settlement. This settlement involves the purchase of 921.18 million shares of parent firm Bloomberry by Sureste Properties Inc. (SPI) at P18.32 per share, representing 8.1 percent of the total outstanding shares held by GGAM.
Following the announcement of the settlement, Bloomberry’s shares experienced an 8.7 percent drop to P10.50 per share as the market factored in the cost of the dispute resolution. The buyout will be completed through a special block sale at the Philippine Stock Exchange (PSE).
Analysts have noted that while the purchase of shares will eliminate the overhang on Bloomberry shares, it may lead to increased interest expenses in the future if the company decides to borrow funds for working capital and other capital expenditures. This transaction will not impact the profit and loss of Bloomberry.
Public ownership in Bloomberry will decrease from 37.17 percent to 29.07 percent as a result of this settlement, affecting the company’s weighting on stock indices. The dispute arose in 2013 when GGAM was ousted from the management of Solaire Resorts & Casino, leading to a legal battle over contract breaches. In 2016, an arbitration court upheld GGAM’s claim to an 8.7-percent stake in Bloomberry.
The settlement amount agreed upon is close to the monetary award that Bloomberry would have had to pay had they not opposed the arbitration court’s decision. This resolution brings an end to a long-standing legal issue between the two parties that has spanned over a decade.
