Reuters – Permira Raises $750M on Galaxy Casino Sale

European private equity firm Permira has raised $750 million by selling around half of its stake in Macau casino operator Galaxy Entertainment Group Ltd, two sources with direct knowledge of the deal said, Reuters reported. The widely expected deal, struck late on Tuesday, was Permira’s second sale of Galaxy shares in less than a year. The latest sale takes Permira’s total gains to more than 60% on its original investment in Galaxy in 2007, profiting from the boom in Macau’s gaming industry in recent years.

(Reuters) – European private equity firm Permira has raised $750 million by selling around half of its stake in Macau casino operator Galaxy Entertainment Group Ltd, two sources with direct knowledge of the deal said.

 

The widely expected deal, struck late on Tuesday, was Permira’s second sale of Galaxy shares in less than a year.

 

The latest sale takes Permira’s total gains to more than 60 percent on its original investment in Galaxy in 2007, profiting from the boom in Macau’s gaming industry in recent years.

 

Permira sold 278.8 million Galaxy shares at HK$21 each, putting the total deal value at HK$5.85 billion ($754.2 million), the sources said, speaking on condition of anonymity because they were not authorised to talk publicly on the matter.

 

It sold the shares at a 4.1 percent discount to Monday’s close of HK$21.9.

 

Permira has raised around HK$10.7 billion from the sales on Tuesday and last September, and it still holds a stake of approximately 6 percent valued at about HK$5.7 billion at current market prices.

 

The buyers were a small group of investors, with one investor alone taking up the majority of the stock offered, the source added.

 

The deal took place the day after Galaxy reported a ninefold surge in first-half profit.

 

“Risk appetite is higher now than at the beginning of the summer, but investors are being selective,” one of the sources said.

 

Permira declined to comment.

 

The Galaxy investment has been hugely profitable for Permira, which invested HK$6.53 billion in 2007 for a 20 percent stake in the casino company.

 

A shareholder had agreed to sell about 280 million of its shares, Galaxy said in a statement, without identifying the seller. ($1 = 7.7563 Hong Kong dollars) (Reporting by Elzio Barreto; Additional reporting by Stephen Aldred and Farah Master; Editing by Daniel Magnowski)