Gambling magnate Lawrence Ho has sold his stake in the Australian gambling giant Crown Resorts, putting an end to his group’s lengthy attempts to set foot in the casino industry of the country.
A little less than a year after Melco Resorts & Entertainment, owned by Mr Ho, purchased a 9.99% stake into Crown Resorts, his company sold the assets it owned in the Australian gambling giant to Blackstone, an American private equity firm. Reportedly, the stake was sold at a loss of almost $330 million.
As it became clear, Melco Resorts agreed to sell out its assets in the Australian gambling company at the price of AU$8.15 per share. In comparison, in June 2019, it purchased the stake at AU$13 per share, with that meaning that the company was at loss.
As Casino Guardian reported at the time, in 2019, Melco Resorts agreed to purchase a 20% stake in from Crown Resorts’ major investor, James Packer for a total of AU$1.76 billion in two tranches. However, only the first transaction took place, as the second one was put off following the start of a New South Wales (NSW) inquiry into alleged violation of Crown Resorts’ Sydney Barangaroo casino licence. The probe is also aimed to make sure whether or not the Australian gambling company had any relationship with Asian criminal organisations.
Melco Resorts’ Withdrawal Fuels Speculation about Possible Takeover Move by Another Company
The above-mentioned inquiry initiated by the NSW Independent Liquor and Gaming Authority into Crown Resorts started in January 2020 but has been put on hold due to the Covid-19 pandemic. It is set to find out whether Melco Resorts & Entertainment was a suitable partner for the Australian gambling giant to get involved in the latter’s new casino operation that is currently under construction in Sydney. It is also aimed to prove whether or not the agreement between Mr Packer and Mr Lawrence Ho breached the Barangaroo casino licence due to alleged links to Mr Ho’s father.
As shared by gaming analysts, the sale of Melco’s share in Crown Resorts comes at a time when the coronavirus pandemic has already had a significant negative impact on the casino sector in the main Asian markets of the company. The temporary closures of Macau gambling halls and the ceased operations of the tourist sector that once brought a large number of affluent gamblers to the venues have caused a massive decline in gambling revenue of over 80% in the region.
Now, the announcement of Melco Resorts’ withdrawal from the stake acquisition in Crown Resorts has fuelled speculation about a possible takeover move for the company by Blackstone in the future. According to some analysts, the company could seek to split off the property portfolio of the Australian gambling company, or by another global gambling giant, provided the fact that Melco Resorts is no longer considered a potential setback for any takeover transaction.
Previously, the main shareholder of the Australian gambling giant, James Packer, has indicated his willingness to sell his 36% stake in Crown Resorts at the time of the negotiations with Wynn Resorts in April 2019.
- Author
Olivia Cole
