Melco Resorts Delays Crown Resorts $1.2B Share Acquisition, Regulatory Probe Cited
Posted on: August 28, 2019, 07:32h.
Last updated on: August 28, 2019, 12:18h.
Melco Resorts is delaying its full $1.2 billion share acquisition stake in Crown Resorts to give regulators in Australia ample time to conduct a probe into the deal.
In late May, Melco and Aussie billionaire and founder of Crown Resorts James Packer entered into an agreement for him to sell 19.99 percent of his stake in the casino giant for AUD$1.76 billion ($1.2 billion). The first bulk of 67,675,000 shares closed on June 6 – 10 percent of the overall terms.
That triggered an announcement from the New South Wales (NSW) Independent Liquor & Gaming Authority that it is launching a review of the deal. Melco and Packer agreed to delay the second and final share acquisition scheduled to close September 30 by 60 days.
The Liquor & Gaming Authority says their goal is to make sure allowing Melco to obtain a considerable ownership stake in Crown doesn’t “cause harm to the public interest and to individuals and families.”
NSW is home to the under-construction Crown Sydney integrated casino resort. The $1.5 billion complex is scheduled to open in 2021.
Following Melco Resorts and Packer’s share contract, authorities in Australia said they would be investigating various aspects of the arrangement.
The leading determination is the relationship Melco billionaire founder and CEO Lawrence Ho maintains with his father, Stanley, the Macau “King of Gambling” who held a casino monopoly on the enclave until it was returned from Portugal to China.
In a 2014 agreement with NSW for its Sydney project, Crown agreed to refrain from doing any business with Stanley Ho or the roughly 60 companies he either owns or is involved with because of long-standing allegations of the 97-year-old being associated with organized triad crime networks.
Lawrence has maintained his business dealings are separate from his father’s holdings.
“Both Crown and I have always stressed that my business dealings are independent of my father’s interests,” Ho, one of Stanley’s 17 children to four women, said recently. “We have already been in partnership with Crown for 12 years and have passed probity screens from regulators without an issue.”
Ho added that he is “always happy to go through the regulatory process,” and prefers “jurisdictions where there is a strong governance and a strong regulatory regime.”
Australian media outlets have raised claims that Crown Resorts has ties to Asian crime syndicates and questionable junket operators that cater to high rollers. The reports suggest the Aussie casino operator and its junket partners allowed known criminals and money launderers to visit its properties Down Under, allegations Crown calls “deceitful, unbalanced, and sensationalized.”
Crown’s had a tough go in recent years. It began in 2017, when Melco and Crown were still partnered in Macau. It was then that 18 Crown employees were detained in China on “gambling-related offenses.” Crown VIP exec Jason O’Connor was put in jail for 10 months.
Following his split from fiancé Mariah Carey, the 51-year-old Packer said he began downing a bottle of vodka a day, as he battled severe depression and mental health issues.