Lawrence Ho and his casino giant Melco Resorts will postpone the full AU$1.76-billion acquisition of James Packers’ share in the Australian gambling company Crown Resorts until after the gambling regulatory body of New South Wales (NSW) completes the ongoing inquiry into the deal and other issues regarding Crown. It is unclear when this will happen, but the takeover could also be fully cancelled in case the regulator rolls out conditions under which the deal between Mr Packer and Lawrence Ho is considered unacceptable.
The first part of the 67.9 million shares in Crown – just a little under 10% – was purchased by Mr Ho at the beginning of June 2019. The sale was expected to be finalised with a second transaction by the end of September. However, considering the pressure which has been piling on the two companies and the share sale, the two parties have agreed to delay the second transaction to provide more time for the Australian regulator’s probe to be completed.
As Casino Guardian has previously reported, the Independent Liquor and Gaming Authority of NSW has launched a public inquiry into Crown Resorts following a series of reports alleging links between the junket operators used by Crown to bring affluent Asian patrons to its casinos in Australia and certain criminal organisations.
The share purchase of Mr Ho will also have to pass probity checks from regulatory bodies in the states of Victoria, New South Wales and Western Australia.
The Parties Were Supposed to Complete the Sale by September 30th
Melco Resorts reaffirmed that it remains interested in completing the deal and highlighted the fact that both companies have high regard for the regulatory probe. On the other hand, Consolidated Press Holdings of Mr Packer commented that despite the company did not consider there had been any breach of licence conditions or legislation, it would remain cooperative so that the state’s gambling regulator could proceed with its inquiry.
The Independent Liquor and Gaming Authority of NSW is preparing to unveil the terms of reference for an inquiry into the revelations made by a number of local news hubs regarding links to criminal organisations as early as today. The state’s gambling regulatory body will also dig into the sale of Mr Packer’s 20% stake in the Australian casino giant Crown Resorts to Laurence Ho’s Melco Resorts. The regulator will also examine the links of Melco to Mr Ho’s father, the Macau casino mogul Stanley Ho, who has long been alleged in links to organised crime into the region.
In late May, the two companies reached an agreement for Melco Resorts to purchase Mr Packer’s 20% stake in Crown Resorts in an AU$1.76-billion deal and a transaction of half of the shares was successfully carried out shortly after. They were supposed to transfer the other half of the stake by the end of September, but considering the ongoing probe, this would be hardly possible.
Under the terms of the new agreement between Mr Packer and Melco Resorts, the parties will be provided with a 60-day period after the regulatory processes are through to finalise the deal by completing the second transaction of shares. If the sale is not carried out by May 31st, 2020 – a deadline which either company would be able to extend by six months – then the deal could be terminated by either Mr Packer or Mr Ho. Whether this will happen, remains unknown to the present day.
In any case, analysts believe that the recent controversy is not helping Crown Resorts’ struggling high-roller business, which turnover suffered a 26.1% decline to AU$38 billion in the 2018/19 fiscal year.
- Author
Olivia Cole
