Genting Singapore Plc, one of Singapore’s two casino-resort operators, said it’s selling its entire 4.8% stake in Australia’s Echo Entertainment Group following a review of its investments.
The shares of Sydney’s only casino operator will be sold at A$3.99 apiece, Genting Singapore said in a statement to the Singapore exchange yesterday, or about A$158 million ($202.1 million). The price is a 2.7% discount to Echo’s close of A$4.10 yesterday. The shares will be sold as a block trade on the Australian exchange, underwritten by Citigroup Inc.
The divestment “comes after a review by the company to rationalize its investments portfolio,” Genting Singapore said in the statement.
Businesses linked to Genting Bhd., Genting Singapore’s parent, and Malaysian tycoon Lim Kok Thay, chairman of both companies, sought approval three months ago to boost the stake in Echo above 10% amid a push by gaming operators to attract high rollers who have driven Macau casino revenue to about US$37 billion ($45.3 billion) in the year through June.
“It’s consistent with what Genting Singapore has been saying that it’s just a quoted investment, they don’t see it as strategic,” said Carey Wong, an analyst at OCBC Investment Research in Singapore. “It depends on what the parent actually wants to do with it but from Genting Singapore’s point of view, they made it pretty clear.’”
REMAINS COMMITTED
Lim is traveling overseas and couldn’t be reached for a comment at his Kuala Lumpur office yesterday. Genting Hong Kong Ltd., which also bought shares of Echo, said in a statement yesterday it will continue to hold its investment and “remains committed” to the application to New South Wales and Queensland authorities to boost its stake in the Australian gaming operator.
Genting Singapore shares climbed 1.8% to $1.41 at the close in Singapore trading, while its Malaysian parent company declined 0.1% to 9.02 ringgit.
Echo, operator of Sydney’s only casino, said on Aug. 15 it wants more tables for high-stakes gamblers in the city, following a push by competitor Crown to add capacity through a possible joint venture.
Crown, controlled by Australian billionaire James Packer, said Aug. 10 that it wanted to split Echo’s license between the Star casino and the nearby Barangaroo development site, where it plans to build a hotel. Crown had also sought regulatory approval earlier this year to exceed 10% caps on its shareholding in the Brisbane-based gaming operator.
{jcomments on}