According to people familiar with the matter, James Packer, the third richest man in Australia, has already entered discussions related to the return of his casino assets to private ownership.
Crown Resorts’ market value is estimated at $7.9 billion and Packer is currently in talks with pension funds and equity organizations that might be interested in an eventual joint bid for some company’s assets. However, the outcome of the negotiations is still uncertain. The deal might not even be finalized in case the talks fall through.
Crown Resorts is in charge of the well-known casinos in Perth and Melbourne, but its shares have fallen 31% in Sydney. In addition, the joint venture of James Packer and Lawrence Ho was severely affected by the Xi Jinping anti-corruption politics. The Macau-based casino is currently experiencing financial issues brought about by the government curbs on illicit money that made high rollers opt for another gambling destination.
Back in October, the Hollywood-themed Studio City opened doors and at that time, Crown representatives firmly stated that the slowdown in the Chinese administrative region was exaggerated and expressed their hopes for a long-term development of the venue.
Mr. Packer stepped down from his post as a chairman of Crown Resorts with the aim of dedicating all his time and efforts to Consolidated Press’ projects. He remains focused on the construction of a Las Vegas-based casino and the establishment of an ultra luxurious resort in Barangaroo, Sydney. Packer is expected to invest about A$657 million until 2019. The casino is intended to attract the richest players from around the world.
According to people with knowledge on the matter James Packer has a pretty good reason for teaming up with private equity firms as this would help him strip out costs and overcome the rougher periods easily.
A representative of Arnhem Investment Management, a Crown shareholder, commented on Mr. Packer’s prospect of privatization and said that it was absolutely justified. The intensified anti-corruption campaign of the Chinese government has had an adverse effect on the revenue. The Melbourne and Perth-based venues were also affected by the weak spending.
As for James Packer himself, he remained tight-lipped as to what was the main reason behind his decision to return his company assets into private ownership. In point of fact, the casino mogul has always preferred to solve his business matters behind closed doors. Yet, the announcement that he might take Crown private were not too surprising. According to reliable sources, there have been various suggestions for Crown Resorts’ future development and partial privatization was also put forward.
