Crown to split Australian casinos from overseas assets

SYDNEY, Australia – Australia’s Crown Resorts on Wednesday, June 15, said it will separate its “high-performing” local assets from its international businesses, namely casinos in under-performing Macau, which have dragged on domestic interests.

The company, majority owned by mogul James Packer, said the initiatives were endorsed by the board and were designed to maximize shareholder value and ensure a more efficient ownership structure for Crown’s assets.

The demerger will lump together casinos in Melbourne and Perth, a proposed luxury resort in Sydney, and its gambling and online gaming operations, the company said. London casino Crown Aspinalls will also be included.

A new entity will take Crown’s interest in Macau-focused Melco Crown Entertainment (MCE), which also has assets in the Philippines, as well as the Alon development site in Las Vegas.

Gambling revenue in Macau has been hit hard by China’s corruption crackdown, and fell 34.3% to a 5-year low of 230.84 billion patacas ($28.92 billion) in 2015, the second straight year of declines.

“The board has for some time been looking to address what we believe to be a material undervaluation by the market of Crown Resorts’ assets, due to a traditional consolidated (or amalgamated) structure,” Crown Resorts’ chairman Robert Rankin said in a statement.

“In particular, we believe that Crown Resorts’ extremely high quality Australian resorts are not being fully valued and the Crown Resorts share price has been highly correlated to the performance of its investment in Macau.”

The spin-off would also include Crown’s 50% interest in the Aspers Group, which operates 4 casinos in the United Kingdom, and Crown’s 20% interest in Nobu restaurants.

In May, Crown Resorts offloaded part of its stake in MCE for US$800 million, a move which at the time sent its Australian share price rocketing 5.75%.

Billionaire Packer, who is engaged to pop diva Mariah Carey, owns 53% of Crown Resorts but resigned as chairman in 2015. – Rappler.com