Yokohama IR Processes Likely On Hold Soon, Analysts

Samuel Insaou, an analyst at Maybank Investment Bank Bhd, suggested that the Request for Proposition (RFP) process on commercial partners that Yokohama is leaning toward to acquire the casino complex was “likely to be put on hold soon.” That came after opposition-backed Takeharu Yamanaka won Sunday’s mayoral election in Yokohama, campaigning on the anti-integrated resort (IR) agenda.

“The Yokohama mayoral election has resulted in the election of a decisively anti-IR mayor,” he wrote in a note on Sunday. “We therefore think the Yokohama IRFP process will soon be put on hold,” he added.

“Yokohama will soon issue an official statement clarifying that it will not make a bid,” Kyodo quoted Mr Yamanaka as saying on Sunday evening.

Yokohama (pictured) finalized its RFP submission period in June. Genting Singapore, the operator of Resorts World Sentosa, a Singaporean casino venue, and Melco Resorts and Entertainment Ltd, the casino operator that operates venues in Macau and the Philippines, have been identified as the two candidates for the race. A decision on the winning offer is expected in the coming months.

Securities firm Nomura also said in a note on Monday that the results of the market election were “negative to Yokohama’s potential for IR development.”

“News reports suggest Mr Yamanaka will abandon the IRFP process in the coming days,” wrote Nomura analysts Tushar Mohata and Alpha Aggarwal.

They added: “Investors who were positioning for positive news from Yokohama, as well as parent company Genting Bhd, may take the news negatively in the short term.”

In a recent note, Maybank suggested Genting Singapore is better placed in the race to become a casino complex partner in Yokohama. The casino company partnered with Japan-based entertainment and gaming giant Sega Sammy Holdings Inc. for the Yokohama project.

Sega Sammy said in June it plans to spend about 120 billion yen ($1.09 billion) on the cost of a casino resort in Yokohama.

Earlier this month, Sega Sammy’s management acknowledged that if an anti-IR mayor was elected in Yokohama, “we would face the reality of losing one of our strategic investment options.”

In a Q&A, the company’s management said, “In this case, we will not consider an immediate withdrawal from the IR business… We believe that we are a leading company in the Japanese IR business, and we will not give up the opportunity any time soon.”

The company’s management added: “We will have to consider other options, such as whether we can find opportunities in other municipalities in Japan.”

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