3:39 amMay 23, 2013 Asia James Packer Gambles with $254 Million...

3:39 am
May 23, 2013
Asia

James Packer Gambles with $254 Million Echo Stake Sale


By David Winning
James Packer has just cashed in his chips with regard to Echo Entertainment Ltd. EGP.AU 0.00%, but the billionaire remains firmly at the table in the race to offer casino games to high-rollers in Sydney.

Mr. Packer’s casino company Crown Ltd. CWN.AU +0.77% is banking 264 million Australian dollars (US$254 million) from the sale of its 10% stake in Echo—a surprise move that comes just two weeks after the New South Wales state government signaled it wouldn’t oppose him more than doubling his interest.

Selling out of Echo removes a potential conflict of interest as authorities run the rule over separate applications by Crown and Echo for licenses to run a casino in Sydney from 2019.

Echo, which owns The Star casino in Sydney, only has exclusive rights till then but wants them extended. Crown is seeking approval to add a casino for high-rollers to its proposed Barangaroo hotel development in Sydney.

Of course, Mr. Packer could rebuild the stake in Echo after authorities decide on the proposals if the outcome isn’t in Crown’s favor. Sydney’s beaches, picturesque harbor and culture continue to lure overseas visitors – particularly from China – and a casino is a major draw.

But it’s a high stakes game. Crown’s interest in Echo was seen as a deterrent to other possible bidders for Echo. Units of Malaysia’s Genting Bhd. 3182.KU -1.52% already loom large over the register with a 5.2% holding.

Mr. Packer clearly thinks he has good cards, but has left himself open to being trumped.

http://blogs.wsj.com/moneybeat/2013/05/23/james-packer-gambles-with-254-million-echo-stake-sale/