Asia Entertainment & Resources Ltd. is a holding company which operates through its subsidiaries and related promotion companies as a VIP room gaming promoter, receiving revenues from such activities. The company's VIP room gaming promoters currently participate in the promotion of three major luxury VIP gaming facilities in Macao, the largest gaming market in the world. The three facilities are located at the Star World Hotel & Casino, the Galaxy Macau resort in Cotai and the Venetian Macao Resort Hotel, also in Cotai.
The company announced today that it has entered into a non-binding memorandum of understanding to acquire Bao Li Gaming Promotion Limited, a Macao-based VIP gaming promoter that currently operates one room with five tables at City of Dreams Macau, a Melco Crown property. This casino offers both the fixed commission and the revenue sharing remuneration model, and this VIP room will operate under the revenue sharing model.
Subject to due diligence and the customary closing conditions, Asia Entertainment expects to close the transaction by September 30, 2012. Asia Entertainment is expected to pay approximately $15 million for 100 percent of Bao Li Gaming's operations. Additionally, if its 'rolling chip turnover' is at least $2.5 billion in each of the three years ending December 31, 2013, 2014 and 2015, its shareholders would receive three additional installments of $13 million and 625,000 ordinary shares of AERL. The shareholders can also receive additional incentives if those targets are exceeded.
This proposed deal is an important one for Asia Entertainment. In addition to its presence in the Galaxy and Las Vegas Sands casinos, it now will have a presence with another gaming license holder (Melco Crown). Upon completion of the deal, Asia Entertainment will have 34 tables in four VIP rooms. For further information about Asia Entertainment & Resources and its gaming activities in Macao, please visit the company's website at http://ir.aerlf.com/index.cfm
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