Crown Resorts to Sell Its Melco Resorts and Entertainment’s Remaining Holdings

One of Australia’s largest entertainment groups, Crown Resorts, has agreed to dispose of its remaining holdings in the casino joint venture with Melco Resorts. The company revealed that it has put an end to the joint venture, and Melco Resorts and Entertainment announced the launch of a public offering of approximately 28 million American depositary shares.

The public offering follows a repurchase of Crown’s remaining stake in the joint venture. The latter currently operates casinos located in Manila and Macau. Also, as a result of the sale announcement, Melco Resorts and Entertainment confirmed that the last non-executive director of Crown Resorts on the board of Melco Resorts and Entertainment – Robert Rankin – is to leave his seat in the former joint venture.

It was only a year ago when Crown Resorts started reducing its overall stake in its joint venture with Melco Resorts. At that time, the company’s stake in the joint venture preceding the Melco Resorts and Entertainment – Melco Crown Entertainment (MCE) – amounted to 34.3% in total. After the first reduction, the company’s holdings in MCE amounted to 27.4%. Later, Crown further reduced its stake to 11.2%. It was at that time when MCE officially announced that it is to re-brand to Melco Resorts and Entertainment (MRE) in order to reflect the controlling role of Melco and the diminished one of Crown.

According to some market experts, this step could end up with putting the two companies, once partners, at position of rivals, as both of them seem to have their eyes on Japan. The country, which is currently estimated as the third-largest economy on a global scale, has just opened its market to gambling, so it would probably become one of the main expansion targets for operators who are looking to consolidate their positions on regulated markets internationally.

As revealed by the two former partners, Crown Resorts is to sell what is left in its holding in Melco Crown Entertainment to Melco Resorts, which is currently owned by the Hong Kong mogul Lawrence Ho. The prize of the remaining stake amounts to $1.2 billion. As revealed by Melco Resorts, the company is to fund its purchase via a public offering.

The owner of Melco Resorts, Lawrence Ho, explained that the decision to sell the remaining assets in Melco Crown Entertainment was a strategic one, in spite of the fact that the partnership with Crown was a positive one. He also confirmed that the assets disposal would provide Melco with a chance to pursue an expansion in Japan.

Mr. Ho also added that the former joint venture was actually a proof that Melco Resorts was perfectly capable to work in collaboration with a partner in both favourable and more challenging operating environment. He explained that he was very proud with the achievements of the joint venture over the past ten years and expressed his gratitude to Crown’s boss James Packer.

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Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.
Daniel Williams
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