Consolidated Press Holdings sold almost half of his stake in the casino giant to Melco Resort and Entertainment.
Australian billionaire James Packer has relinquished control of Crown Resorts after his private investment company sold almost half of his stake in the casino giant for A$1.76 billion.
Consolidated Press Holdings (CPH), James Packer’s 65-year-old private investment company set up by his father Kerry Packer, said it had sold 19.99 per cent of its shareholding in Crown Resorts to the Hong Kong-based Melco Resorts and Entertainment, which is operated by Mr Lawrence Ho.
It was sold for an aggregate purchase price of A$1.76 billion, equivalent to A$13 per share. This is A$1.75 per share below a deal proposed by Las Vegas casino giant Wynn Resorts in April, meaning James Packer has lost A$236 million in potential profits.
Once the share sale is completed, CPH will own about 26 per cent of Crown, worth about A$2.3 billion, and will remain represented on the Crown board.
Crown Resorts is one of Australia’s largest gaming and entertainment groups, with two integrated resorts in Melbourne and Perth and another currently being built in Barangaroo, Sydney. Crown also owns and operates Crown Aspinalls in London, one of the high-end licensed casinos in the West End entertainment district.
“I am thrilled Lawrence Ho and Melco have chosen to invest in Crown,” James Packer said in a statement.
“Crown has been a massive part of my life for the last 20 years and that absolutely remains the case today – my continuing Crown shareholding represents my single largest investment.
“I am still vitally interested in Crown’s success as a world-class resort and gaming business. The sale allows me to continue my long-term involvement with Crown and at the same time to better diversify my investment portfolio.”
In a biography about Packer, Damon Kitney wrote that an end of Packer’s involvement with Crown would be an end of an era for Australian business.
The biography ends with solemn comments of resignation from Packer, which Kitney says is evidence the billionaire is keen to relinquish his role as a business tycoon.
“Some people handle pressure well and some don’t. I don’t. I don’t know if that is because I am wired that way,” Packer told the author. “Or if it is because bad things have actually happened to me. I am tired of being on this rollercoaster. I don’t want to do it any more. I’m ready to put my hands up for a few years. I really am.”
A bond of ‘brothers’ https://t.co/UhHTtldpH3
— Damon Kitney (@DamonKitney) May 30, 2019
Ho said the two companies shared similar DNA and expressed confidence in Crown’s Barangaroo development in Sydney.
“Crown’s resorts in Perth and Melbourne are world-class entertainment destinations and I believe that Crown Sydney, much like Melco’s Morpheus property, will create an architectural icon for the city, the country and the world,” Mr Ho said.
On Wall Street, Melco shares dropped on the announcement and finished 5.6 per cent lower.
Melco said in a statement to the Nasdaq stock exchange it intended to pursue representation on Crown’s board once it obtains approval from gaming regulatory authorities across Australia.
The company also signalled it would be willing to increase its stake in Crown.
“Additionally, subject to obtaining requisite regulatory approvals, Melco welcomes the opportunity to increase its ownership in Crown.”
Ho is the son of Macau gaming tycoon Stanley Ho. In a 2014 agreement with the NSW Government, Crown promised it would prevent associations with Stanley Ho as a condition of its licence to establish its Barangaroo complex, SMH reported.
That included a clause saying: “Crown will ensure that it prevents… Stanley Huang Sun Ho or a Stanley Ho Associate from acquiring any direct, indirect or beneficial interest in Crown, a subsidiary of Crown.”
The agreement also bans any material deals between Crown and Stanley Ho or his associates and precludes Stanley Ho from holding certain roles with Crown.