Casino operator Crown Resorts will spin off international assets including a US$2 billion stake in Melco Crown Entertainment Ltd under a plan to increase returns for controlling shareholder James Packer, Bloomberg reported.
The newly listed entity is also set to house Crown’s development site in Las Vegas, a 20 percent stake in Japanese restaurant Nobu and half of UK casino operator Aspers Group, the Melbourne-based company said in a statement. The gaming firm has a 27 percent stake in Nasdaq-listed Melco, which runs casinos in Macau and the Philippines.
Chairman Robert Rankin said the split was designed to isolate Crown’s Australian casino business from the wider group, which he said investors undervalued because of a gambling downturn in Macau. Shares in Crown, which is controlled by Packer’s closely-held investment company Consolidated Press Holdings, have tumbled more than 30 percent since January 2014.
Shareholders, led by Packer – who has a net worth of $3.4 billion – will own equity in the new international entity proportionate to their Crown stakes, the company said. After the spinoff, Crown would hold gambling resorts in Melbourne, Perth and a planned luxury hotel-casino in Sydney. London casino Aspinalls and online gaming operations such as CrownBet would also be part of Crown.
“The proposed demerger reflects the different nature of Crown Resorts’ controlled Australian operating assets from its international investments,” Rankin said in the statement. “The Crown Resorts share price has been highly correlated to the performance of its investment in Macau.”
Gambling revenue in the southern Chinese territory of Macau has been hurt by government curbs on illicit money flows and a campaign against corruption that deterred VIP players. In May, Crown sold an US$800 million stake in Melco.