Packer Wins Approval to Increase Crown Stake in Echo
Stock Chart for Echo Entertainment Group Ltd (EGP)
The New South Wales state gaming authority said Crown, which holds 10 percent of Echo, has three years to increase its stake to as much as 23 percent. Crown said in a statement it was awaiting similar approval from authorities in Queensland state, where Echo also operates casinos.
Brisbane-based Echo is seeking to extend its license to operate Sydney’s only casino beyond 2019, potentially blocking Packer’s bid to build a A$1 billion ($1 billion) hotel and casino targeting high-rolling Asian gamblers on the shores of the city’s harbor. Genting Hong Kong Ltd., the cruise ship company controlled by Lim Kok Thay, in October applied to raise its stake in Echo to 25 percent.
A spokesman for Echo in Sydney declined to comment on the regulator’s decision. Crown Chief Financial Officer Ken Barton wasn’t immediately available to comment.
Genting’s application was “still under consideration and a timeframe could not be provided for its determination,” Mark Nolan, a spokesman for the NSW Independent Liquor and Gaming Authority, said by phone from Sydney.
The NSW state government is currently considering Crown’s proposal to build a six-star hotel and casino. It is also examining Echo’s bid to extend its exclusive license for Sydney’s Star casino and spend more money to upgrade the site. The state will only grant one of the proposals, Premier Barry O’Farrell’s office said in a statement last month.
Melbourne-based Crown, which Packer controls through a 50 percent shareholding, bought 10 percent of Echo last year and had sought approval to lift its stake to 25 percent. It operates casinos in Melbourne and Perth.
Genting Hong Kong has a 5.2 percent stake, according to data compiled by Bloomberg.
Echo’s constitution restricts an investor from owning more than a 10 percent voting share without written consent from the NSW gaming authority and the Attorney General in Queensland state.
Crown’s application is “still under consideration,” Mike Sarquis, executive director for the Office of Liquor and Gaming Regulation in Queensland, said by phone.
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