US private equity giant, Blackstone Group has taken a sizeable stake in casino operator Crown Resorts.
Crown told the ASX Blackstone has purchased 67.7 million shares at $8.15 per share, representing a 9.99% stake in the company.
The shares were purchased from former Crown suitor Melco Resorts, run by Lawrence Ho. It was worth $US551 million.
Selling out at $8.15 a share on Wednesday, compared to the $13 purchase price, means Melco is down around $330 million through its Crown flutter.
Crown shares jumped 12.3% to hit a six-week high of $9.66, then asked to be up 10.9% at $9.54.
Falling tourist numbers due to curbs imposed to contain the new coronavirus saw Melco in February scrap its planned purchase of a second 9.99% stake in Crown from billionaire James Packer, in a deal that had already raised regulatory concern.
But that decision also coincided with the pushing ahead of an inquiry in NSW into the Melco holding, how it was acquired, and the role of the Crown board. That inquiry has been put on hold because of the lockdown.
Melco first agreed in May last year to buy a 20% stake in Crown from James Packer for $1.76 billion, but only 9.99% changed hands.
The second tranche of shares was put on hold while the NSW inquiry probed whether Melco’s involvement in Crown breached its Sydney casino license along with other probity issues dogging the company.
It is not clear if the inquiry will continue. Investors, by pushing the shares higher, seem to be punting on it not continuing.
