Australian gambling operator Crown Resorts Ltd. announced on Wednesday that it would demerge its international assets from the whole group so as to create a holding company that would be listed separately. The demerger is to be implemented after detailed consideration by the casino company’s Board and comes as part of its strategy to enhance shareholder value.
The demerged holding company would be listed as InternationalCo and would manage Crown Resorts’ stake in Melco Crown Entertainment. The latter currently manages a number of casino properties in Macau, with Studio City being the latest to open doors.
Crown Resorts has invested the total amount of A$752 million in Melco Crown Entertainment, which resulted in cash returns of about A$1.4 billion. Last month, the Australian casino operator reduced its stake in its joint business with fellow gambling company Melco International Development to 27.4%.
After the demerger, InternationalCo would also own Crown Resorts’ current investment in the Alon casino project in Las Vegas, its 20% stake in the Nobu chain of restaurants, its 50% interest in UK-based casino operator Aspers, and its investment in Caesars.
After demerging the above-mentioned assets into a separate company, Crown Resorts would keep on operating its Australian properties, with those being Crown Melbourne, Crown Perth, Crown Sydney, Crown Aspinalls, as well as its wagering and online investments.
InternationalCo and Crown Resorts would have its own Board of Directors each as well as a separate management team. Crown Resorts’ Chairman Robert Rankin would also be appointed as Chairman of the demerged business. What is more, Crown Resorts’ Board would remain unchanged after the demerger’s completion.
Commenting on Crown Resorts decision to split its international assets from its domestic ones, Mr. Ranking said that the Board wanted to address what was considered to be undervaluation of the Australian properties that have been demonstrating excellent performance for some time now.
The official further noted that the demerger represents the “different nature” of the Australian and the international operations and once completed, it would provide investors with a wider investment choice as well as with greater transparency on all existing assets.
As part of its plan to enhance value for shareholders, Crown Resorts also introduced on Wednesday a new dividend policy with increased payout ratio and a potential Initial Public Offering of a 49% share in a property trust that owns Australian hotels operated by Crown Resorts.
