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Packer sells shares in Crown to Melco

AAP  |  31 May 2019Text size  Decrease  Increase  |  
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James Packer has sold almost half his stake in Crown Resorts for $1.76 billion to a Macau-based entertainment company.

Consolidated Press Holdings, Packer's private investment company, confirmed on Thursday night it had sold 19.99 per cent of its shareholding in Crown Resorts (ASX: CWN) to Melco Resorts and Entertainment.

It was sold for an aggregate purchase price of $1.76 billion, equivalent to $13 per share.

Once the share sale is completed, CPH will own about 26 per cent of Crown, worth about $2.3 billion, and will remain represented on the Crown board.

Packer said Crown was a stronger company with Melco as a strategic shareholder.

"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," Packer said of the deal.

"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."

Melco's chief executive Lawrence Ho said the stake was a great opportunity for Melco, which operates casinos across Asia, including in Macau and the Philippines.

"It is certainly our intention to continue if the opportunity arises to increase our stake in Crown," Ho said.

CPH will lodge a Notice of Change in Substantial Holding both with Crown and the Australian Securities Exchange.

At the Morningstar Investment Conference in Sydney yesterday, Morningstar analyst Daniel Ragonese said the Crown Sydney casino was on time and and on budget for completion in fiscal 2022.

“The outlook is positive particularly as they’re going to steal market share from Star Entertainment Group,” Ragonese said.

Ragonese sees Crown as undervalued. He has set a fair value estimate of $15. Crown closed yesterday at $12.92.

With Reuters

provides Morningstar with market news.

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