Southeastern Trims Melco Stake

Southeastern Asset Management (Southeastern) recently reduced their stake in HK-listed Melco International Development (Melco). According to a filing made to the Hong Kong Stock Exchange on May 11th, 2017, the firm sold 8,605,000 shares on the exchange at an average price of HKD 16.35 per share on May 8th (total consideration was ~US$18m). Following the sale, Southeastern’s stake in Melco decreased from 13.10% to 12.54% of the company’s shares outstanding.

Melco is a holding company focused on the gaming, leisure and entertainment space. The company was founded in 1910 and listed on the Hong Kong Stock Exchange in 1927. It currently has operations in China, the Philippines and Russia. Key businesses include:

  • Melco Resorts & Entertainment: a developer, owner and operator of casino gaming and entertainment resort facilities in Macau and the Philippines. Current properties include City of Dreams, Altira Macau, Studio City, the Mocha Clubs and City of Dreams Manila.
  • Entertainment Gaming Asia: a provider of gaming technology solutions. The company provides turn-key solutions for slot machine operations to hotels and other gaming venues in Asia.
  • MelcoLot: a manager of one of the largest lottery retail sales networks in China. The company is also a distributor of scratch cards and lottery vending terminals in the country.
  • Jumbo Kingdom: an operator of the iconic Jumbo Floating Restaurant in Hong Kong.

Southeastern is a privately owned, global investment management firm founded in 1975 and the investment advisor to the Longleaf Partners Funds. The firm currently manages ~US$20bn in assets and employs a value approach to long-only equity investing. You can read more about them here.