Melco Resorts CEO eyes global market with new US-facing SPAC

Melco Resorts CEO Lawrence Ho has filed registration documents for a new “entertainment and media” SPAC with the SEC.

The Asian gaming mogul founded and serves as primary sponsor of the Black Spade Capital (BSC) SPAC, which has applied to trade on the New York Stock Exchange (NYSE).

Once approval for the listing is received, BSC expects to conduct its first IPO of 15 million shares to raise proceeds of $150m.

Each share has an offer price of $10.00 and entitles the bearer to one class A ordinary share, as well as a warrant to purchase a second-class A ordinary share at a slightly higher offer price of $11.50.

BSC has committed to purchasing six million shares in the SPAC as part of its listing. Ho’s sponsorship company, Black Spade Sponsor LLC, has also committed to purchasing seven million warrants in the new SPAC.

While the SPAC has not directly committed to investing in the gambling sector, BSC has said it will look to investigate potential merger targets operating in the entertainment industry, with a focus on “enabling technology, lifestyle brands, products, or services, and entertainment media.”

“Our founder and management team are complemented by our advisors to the board and four independent directors, each with substantial leisure, entertainment, lifestyle, media, and technology expertise and extensive industry relationships,” BSC’s SEC filing stated.

“We believe our founder and management team are well-positioned to identify and evaluate targets across the leisure, entertainment, and lifestyle ecosystem, given their extensive experience operating and growing businesses and broad network of relationships.”

BSC highlighted the experience of Ho and its management teams, suggesting it would make BSC an “attractive partner” to potential target businesses.

Incorporated in the Cayman Islands as a blank-cheque SPAC company, BSC cited the emergence of 350 million Chinese consumers with “evolving consumption patterns and increasing spending power” and their impact across the globe as necessitating a global outlook and special focus on the Asian market.

“Notwithstanding the foregoing, we are not limited to a particular industry and geographic region and may consummate a business combination with a target business in any industry or any region if we believe the business combination is attractive to our company and stockholders,” the SEC filing said.

Ho’s Melco Resorts business predominantly operates in Asia and is a licence holder in the gaming hub of Macau. In 2004, the firm partnered with Australian operator Crown Resorts, led by James Packer on a JV focused on gaming ventures in Macau.

Melco would later acquire a substantial stake in Crown Resorts but divested its interests in the business to Blackstone Group in May 2020.

At the time, the initial acquisition of the Crown stake was the subject of a public inquiry by the NSW Independent Liquor & Gaming Authority, although this was postponed due to the Covid-19 pandemic.

Melco was forced to delist from the Philippines Stock Exchange in 2019 due to negativity surrounding the Crown Resorts scandal in Australia and has been severely affected by closures to its land-based portfolio following the pandemic.

However, the firm’s fortunes have since rebounded, and Melco is listed as one of three shortlisted operators tapped to develop Japan’s first integrated resort (IR) casino property in Yokohama, with a final decision expected in August.