Wed, Aug 14, 8:14am by Staff Writer
Casino tycoon Lawrence Ho’s Melco Resorts says it plans to complete the purchase of another 10 per cent stake in Crown Resorts as agreed with billionaire owner James Packer, despite ongoing investigations regarding whether or not Crown has breached its licence for a new Sydney casino.
The Sydney Morning Herald is reporting that Melco agreed to buy a 20 per cent stake in Crown worth $1.76 billion in May from Mr Packer, with one 10 per cent block transferred shortly after and another 10 per cent to change hands before September 30, which the company says it is obliged to complete under the sale contract.
The transaction is under a spotlight, with the New South Wales gambling watchdog last week launching a probity investigation that will examine Crown’s links to alleged crime figures following allegations last month.
The Independent Liquor and Gaming Authority’s investigation will also examine Melco’s links to Mr Ho’s father, the Macau casino billionaire Stanley Ho, who has long faced allegations of links to organised crime.
Because of these allegations, Crown’s licence granted in 2014 for its $2 billion casino in Sydney’s Barangaroo, due to open in 2021, forbids it from dealing with a list of companies and individuals associated with Stanley Ho.
That list was made public for the first time last week. It shows that one of the banned companies is Lanceford Company Ltd, which Melco CEO Stanley Ho was a director of until shortly after the Crown transaction was made public on May 31.
Another company on the banned list, Great Respect Limited, owns 20 per cent of Melco International – the Hong Kong holding company which Mr Ho chairs and has a controlling stake in Melco Resorts, the Nasdaq-listed company buying into Crown.
Melco’s initial substantial holder notice in Crown lodged with the ASX also lists Great Respect as an associate company with a “relevant interest” in the Crown shares Melco agreed to buy.
Despite the potential for the ILGA to find Melco should not be allowed to own Crown shares, Melco said that it would go ahead with the purchase of the second tranche of stock as originally agreed.
MARGIN CALL | There’s more on the mind of Hong Kong billionaire Lawrence Ho than regulatory approval of his $1.8bn deal to join James Packer as the second whale shareholder at Crown Resorts https://t.co/KlVySDU6mN #ausbiz #Packer $CWN
— Business Review (@aus_business) August 13, 2019
Melco Resorts & Entertainment boss Lawrence Ho has revealed he was given the green light by Beijing before proceeding with the acquisition of a 19.99 per cent stake in Australia’s Crown Resorts.
Asgam is reporting the deal, which will see Melco acquire 145.5 million shares from James Packer’s CPH Crown Holdings for a total consideration of US$1.22 billion came less than three years after 19 Crown Resorts employees were arrested in mainland China for promoting gambling.
At the time, the two companies were still partners in Macau and the Philippines under the Melco-Crown brand.
In an interview expected to appear in the July issue of Inside Asian Gaming, Melco’s Chairman and CEO confirms he spoke with both the Chinese and Macau governments before buying into the Australian casino operator.
“I have regular dialogue [with Beijing] and I’ve had my courtesy talk, and Beijing and Macau were supportive,” he said.
“At the same time, they understand that as a company that’s listed in the US, we’re obligated to do our own thing. But even the couple of quiet talks we had were supportive.”
On the topic of government approvals, Ho also explained that he has considered combining the listing of US-listed Melco Resorts and its parent company Melco International Development Ltd, but had resisted ahead of Macau’s looming licence re-tendering.
“We’ve looked at that,” he said, “but especially with licence renewal on the horizon, the government likes that Melco International controls Melco Resorts and that Melco International is a Hong Kong-listed company that I control. But we’ll look at that in the future,” he said.
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