25 October 2016
James Packer has sold 155 million ordinary shares back to Melco through his privately held Crown Asia Investments.
James Packer has sold 155 million ordinary shares back to Melco through his privately held Crown Asia Investments.

James Packer cuts Melco stake amid Macau slump

Australian billionaire James Packer is expected to resign as co-chairman of Melco Crown Entertainment Ltd. after selling US$800.8 million worth of shares back to the Macau gaming operator amid a crippling downturn.    

Packer will become deputy chairman, Bloomberg reports, citing the Hong Kong-based company.

Melco will buy back 155 million ordinary shares from Packer’s Crown Asia Investments at US$5.1667 per share, cutting its stake to 27 percent from 34 percent, Melco said in a statement Wednesday.

In December, Packer was reported to be in talks to return some of Crown’s casino assets to private ownership after the Melbourne-based company said first-half profit fell more than expected due to Macau’s slump.

Revenue in the world’s biggest gaming hub fell for a 23rd straight month in April, hurt by China’s slowing economy and a government crackdown on graft.

“Crown remains a major shareholder in the company and we look forward to continuing our relationship,” Lawrence Ho, Melco co-chairman chief executive, said in the statement.

In October, Melco opened the Hollywood-themed US$3.2 billion Studio City resort that features a giant Ferris wheel and virtual Batman ride.

Macau casino operators are seeking to draw more tourists as the anti-graft campaign scared off Chinese VIP players.

Melco Leisure & Entertainment Group Ltd. will become the single largest Melco shareholder after the repurchase, which was made at a 1.6 percent premium to the Tuesday closing price of the American depositary shares, the company said.

Crown executive vice president Todd Nisbet will resign as Melco director, with its board then comprising three Melco representatives, two Crown nominees and four independent directors with Ho as chairman, it said.

Consolidated Press Holdings Pty, Packer’s closely held investment vehicle, owns 53 percent of Crown, according to data compiled by Bloomberg.

The billionaire in August stepped down as the Australian company’s chairman to focus on developing new projects, which include a casino being developed in Las Vegas and a hotel for high rollers on the Sydney harbor.

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