James Packer’s Crown Resorts (CWN) has announced plans to spin off some of its international assets and explore a possible float of some of its Australian property holdings.
In a statement to the ASX yesterday after the market closed, Crown said it will pursue a number of structural and capital management initiatives to maximise shareholder value.
One of those involves demerging some of its international investments – ranging from stakes in casino companies or casinos in Macau, Las Vegas, the Philippines and London, as well as a stake in the Nobu restaurant chain – into create a separately listed holding company.
The other option being explored is a potential float of a 49% stake in a property trust that would own Crown Resorts’ Australian hotels (excluding Crown Towers Melbourne). Crown Resorts would retain a 51% stake in that new company.
“The proposed demerger reflects the different nature of Crown Resorts’ controlled Australian operating assets from its international investments. It will provide investors with greater investment choice and transparency on the underlying quality of all Crown Resorts’ assets,” Crown Resorts chair, Robert Rankin, said in yesterday’s statement.
In May, Crown cut its stake in the US-listed Melco Crown Entertainment, a joint venture with Hong Kong’s Melco Group operating casinos and hotels in the Macau where revenues had slid for months on end, along with earnings.
In fact gaming revenues in Macau, have slumped in the wake of Beijing’s crackdown on corruption and China’s economic slowdown. Crown trimmed its stake in Melco to 27% – now worth $A2.7 billion – from 34.3%.
Mr Packer, who resigned as Crown’s chairman in August 2015, will no longer be engaged as a senior executive at the company, but will remain the deputy chairman of Melco Crown Entertainment.
Mr Packer’s private company, Consolidated Press Holdings, could earn up to $8 million annually under a services agreement.
"I am fully supportive of the board’s decisions today," Mr Packer said.
"Crown is one of Australia’s most successful tourism and leisure company’s and I am extremely proud of what we have achieved with our resorts in Australia, but also across Asia. This new corporate structure, well positions
Crown for the next decade as we continue to grow our business and meet the needs of the emerging Asian middle class."
Crown has a market value of $A8.2 billion. Crown shares closed 1.3% lower yesterday at $11.26 with the ASX 200 down another 1.1% (after Tuesday’s 2.1% slump) and are down 10% so far this year.
Crown resorts also said it would adopt a new dividend policy to pay 100% of normalised net profit after tax.
