UBS exercises over allotment option for TI stocks

MANILA, Philippines - The underwriter of newly-listed casino and hospitality firm Travellers International Hotel Group Inc. is taking advantage of the option to buy and sell more shares to help stabilize prices.

In a regulatory filing, the operator of Resorts World Manila said UBS Ag (Hong Kong branch) “notified [Travellers Group] of the exercise of its overallotment option to purchase 23.645 million option shares.”

The transaction, which will be finalized today, is worth P266.71 million.

Travellers Group debuted in the local bourse last month, raising P17.7 billion from the maiden offering of 1.57 billion shares at P11.28 apiece. Shares of the gaming and hotel firm declined 1.26 percent or 14 centavos to end at P10.94 yesterday.

The shares bought by UBS account for a tenth of Travellers Group’s overallotment option to sell as much as 235.98 million additional shares.

The greenshoe or overallotment option is a mechanism to stabilize prices or meet strong takeup by increasing the supply of shares.

During Travellers Group’s initial public offering, the international tranche was covered on the first day of book-building and was five times oversubscribed with over 100 institutional investors from Asia, Europe and the United States. The local tranche, on the other hand, was 15 times oversubscribed.

Travellers Group, a joint venture between the world’s third-largest cruise line operator Genting Hong Kong and local conglomerate Alliance Global Group Inc., will spend around $600 million as it pursues Phase 2 and 3 of Resorts World Manila.

Specifically, the hotel and casino operator will complete the 5,000-seat convention center with function rooms in 2014, the Marriott Hotel expansion in 2015, and new hotels Hilton and Sheraton in 2016.

Phase 2 and 3 will allow Travellers Group to increase retail space by 60 percent and add 1,100 rooms to the existing 1,226 rooms in Resorts World Manila’s Maxim’s, Marriott and Remington hotels.

To date, gaming facilities in the 12-hectare Resorts World Manila consist of 300 tables and more than 1,800 slot machines.

Aside from Resorts World Manila, Travellers Group is also the company behind the $1.1-billion Resorts World Bayshore that will be opened in 2017 at the earliest.

The new casino complex is located in Entertainment City, a 120-hectare property reclaimed from Manila Bay.