James Packer has hired UBS AG to shop around his 10% share in the casino operator he’s bidding against for Sydney’s exclusive license, according to reports.
According to Bloomberg News, which cited three anonymous sources, he’s trying to sell his 82.6 million shares at a fixed price of $3.20. That’s a 7% discount to yesterday’s close price of $3.44.
That means the chunk is worth $264 million.
Packer had only just won approval from gaming regulators in New South Wales and Queensland to raise his stake to 23% though, so why’s he selling?
The most obvious conclusion to draw, is that he somehow knows he is going to win the only license for a casino in Sydney from the New South Wales state government, which is currently trying to decide if Echo gets to keep it, or if Packer’s crown can have it to build a new joint at Barrangaroo.
The Sydney Morning Herald has reported though, that well-placed sources say the decision is about a month away.
So onto the next possibility.
According to Elizabeth Knight at the SMH, selling could also drive down the price, so he can buy it back later.
Which brings us to three, also from Knight, that he just wants some spending money for something that’s got nothing to do with Sydney’s casino wars.
Packer’s Crown is proposing to build a super-luxury Casino across the water from Echo’s existing facility. Echo is saying that if it gets to keep its license, it will spend a lot of money upgrading darling harbour – making it more attractive for tourists.
Both of their pitches lean heavily on how well they can improve Sydney’s standing as a tourist destination.
There was talk that NSW premier Barry O’Farrell might have found a way to give them both a license, but he’s since said there can only be one, as per the regulations.
Which has left everyone on the edge of their seats, waiting to see how the battle of the gaming giants plays out.
Packer shopping around his Echo stake was originally reported by the AFR.
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