James Packer has sold almost half his stake in Crown Resorts for $1.76 billion to entertainment company Melco, led by Packer’s former partner, Hong Kong casino mogul and fellow billionaire, Lawrence Ho.
Crown entered into the agreement with Melco Resorts & Entertainment for a 19.99 per cent share in what forms the billion-dollar deal with the sale reflecting a price of $13 per share.
Once the deal is finalised Packer will own around 26 per cent of Crown, and will remain a representative on the board.
Packer said the move comes as he looks to diversify his investment company Consolidated Press Holdings’ (CPH) portfolio but that he was still “vitally interested” in Crown’s success as a resort and gaming business.
“Crown has been a massive part of my life for the last 20 years and that absolutely remains the case today,” Packer said.
“My continuing Crown shareholding represents my single largest investment. The sale allows me to continue my long term involvement with Crown and at the same time to better diversify my investment portfolio,” he said.
Following the sale CPH’s remaining 26 per cent ownership of Crown will have an approximate value of $2.3 billion.
Packer said he thought Crown was a stronger company with Melco chief executive Lawrence Ho as a strategic shareholder.
“Over the last 15 years Lawrence has built one of the world’s leading resort and gaming companies.
“Melco’s award winning resorts have set the standard internationally and are a testament to Lawrence’s vision and efforts.”
Melco, which is substantially owned by Ho, is a developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia.
“I view Melco’s investment in Crown as an incredible opportunity to purchase a strategic stake in what I believe to be Australia’s premier provider of true integrated resort experiences,” Ho said of the deal.
“Put simply, we share a similar core DNA with respect to how we view our businesses,” Ho said.
Along with Crown Sydney at Barangaroo taking shape, scheduled for a 2021 completion, Crown has resorts across Melbourne, Perth and UK based assets.
The transaction will close in two equal tranches on 6 June and 30 September this year.
CPH, which will continue to be represented on the Crown board, will lodge a Notice of Change in Substantial Holding both with Crown and the Australian Securities Exchange.
Melco intends to pursue board representation on Crown’s board of directors in line with its ownership position.