Crown Resorts’ Spin off Will Affect Its International Operations
The Crown Casino in Melbourne has one goal in mind – the divestiture of its international operations moving from an independently listed company, thus cutting ties with the Macau gaming market which has evidently been affected by the Chinese government’s clampdown on graft.
According to majority Australian owner and billionaire James Packer, Melbourne-based Crown Resorts will include the company’s 27% interest in Macau affiliate Melco Crown Entertainment. This move is the best one in terms of investment as the company hasn’t been performing well when compared to the Crown’s Australian casinos.
According to Crown, the spinoff will give investors bigger choices and the ability to modify their investment, according to their preferred company which will make room for Crown to pay a higher share.
“The board has for some time been looking to address what we believe to be a material undervaluation by the market of Crown Resort’s assets, due to a traditional consolidated structure. In particular, we believe that Crown Resorts’ extremely high-quality Australian resorts aren’t being fully valued and the Crown Resorts share price has been highly correlated to the performance of its investment in Macau,” said Crown Chairman Robert Rankin.
The new establishment will include Crown’s investment in the Alon hotel-casino development situated on the Las Vegas Strip. This will also include the company’s 20% holding in global hotel and restaurant company Nobu, the 50% interest in U.K. casino operator Aspers Group, and the investment in Caesars Growth Partners with assets which include Planet Hollywood resort in Las Vegas. Crown Resorts aim to keep its fully-owned casinos which include the three casinos in Australia and the Aspinalls casino situated in the UK, in addition to its betting and online investments.
The strong domestic gambling expenditure is helping the Australian casino industry in a major way and has thus increased Chinese tourism Down Under which is the opposite with Macau casinos which have been plummeting. In proportion to their current Crown holdings, Crown shareholders will also receive shares in the new company. Crown is contemplating an initial public offering of a 49% interest in a property trust which will hold the majority of Crown’s Australian hotels.