Cashed-up CPPIB lined up as potential Packer backer Feb 3 2016...

Cashed-up CPPIB lined up as potential Packer backer

• Feb 3 2016 at 12:15 AM

• Updated Feb 3 2016 at 5:13 AM

• Sarah Thompson, Anthony Macdonald , Joyce Moullakis

James Packer's push to privatise Crown Resorts appears to be picking up pace ahead of the casino operator's interim results later this month.
Rod Clement
James Packer's push to privatise Crown Resorts appears to be picking up pace ahead of the casino operator's interim results later this month.
Just one week after Street Talk revealed the gambling mogul had initiated talks with US property giant Blackstone Real Estate about a deal, we can reveal another North American investor that has been in and around the discussions.
The state-run Canada Pension Plan Investment Board, which has about $275 billion under management, is understood to have been approached to invest with Packer's Consolidated Press Holdings for a partial or full privatisation of Crown.
It is not known whether the CPPIB talks remain live, however it is another indication about the serious types of investors the Australian billionaire's camp is courting.
CPPIB certainly has the financial firepower to fund a deal. Faced with a commodities slump even larger than that being experienced in Australia, Canada's pension funds have become big players offshore as they comb markets for long-term deals.
CPPIB splashed more than $US67 billion on assets in 2015 including $12 billion on a GE unit and $US650 million on a loan to an Atlantic City casino. It also teamed up with private equity giant CVC on a $US4.6 billion deal to buy pet supplies company Petco.
If it does place a privatisation bet with Packer, it would follow another Canadian pension fund, the Ontario Teacher's Pension Plan, which bought UK lottery operator Camelot, albeit for a smaller sum.
Sources close to the discussions say a possible deal between Packer and a quasi sovereign wealth fund like CPPIB could be a good fit. Pension funds need to make 6 to 7 per cent returns for their members, which is not an easy task in the low interest rate environment.
That means the predictable cashflows generated by Crown's growing global casino footprint may make it an ideal silent partner over a decade or even 15 years compared with the shorter three to five year horizon generally favoured by private equity investors.
Elsewhere in capital markets, Macquarie's equities desk scored the first block trade of the new year when it sold a 4.3 per cent stake in Estia Health for private equity firm Mercury Capital after market on Tuesday.
As first reported by Street Talk, Macquarie sold the shares at $6.65 which was a 3.2 per cent discount to the last close.
Mercury Capital, a New Zealand-based private equity firm, had been an Estia shareholder since before the company's initial public offering in December 2014. The IPO was handled by UBS, Deutsche Bank and Morgan Stanley.
For Macquarie, the trade comes as it seeks to stamp its dominance in the aged care sector. The investment bank floated Japara Healthcare and Regis Healthcare in 2014.

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