Permira divests 6.5% stake in Galaxy Entertainment for $614m

Permira sold its shares through an institutional placement on the Hong Kong Stock Exchange at a more than 5% discount from Galaxy's HK$18.66 closing price Thursday. The private equity firm still owns 528 million shares, or a 12.8% stake, in the group.

According to Permira, the firm made its sale recover a substantial part of its initial investment cost without diminishing its significant minority stake in Galaxy.

"[Galaxy Entertainment Group] has been a very successful investment for the Permira funds to date and we believe there remains very attractive long-term growth potential for Macau and the company," the private equity firm announced in a release. "We are confident of further appreciation in the value of the company and the investment. As such, the Permira funds currently have no immediate plan to dispose of further shares in the Company and intend to continue to hold the remaining shares as long term investment."

Permira acquired a 20% stake in Galaxy for nearly $840 million in 2007. The entertainment group manages one of only six licensed casino operators in Macau, which is poised to surpass Las Vegas' gambling revenue this year by as much as five times.

Permira's news comes one day after Galaxy reported an 84% year-on-year in underlying profit in the first half of 2011, attributed to strong spending by mainland Chinese gamblers. The company reported EBITDA of HK$1.8 billion ($230.9 million), up from HK$990 million a year earlier. The financial performance exceeded market expectations, prompting Galaxy's share prices to rise more than 5% to HK$20.2.

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• Topics
• Greater China
• Exits
• Permira Advisers