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China Gamblers Spurring Echo Deal for Sydney Monopoly

Echo Entertainment Group Ltd. is poised to become the target of the largest casino takeover in more than five years, thanks to its monopoly in Sydney and 16 million potential Chinese gamblers.

As allegations of sexual harassment at Echo’s showpiece Sydney casino The Star pushed its shares to an all-time low this year, Melbourne-based rival Crown Ltd. doubled its stake in Echo to 10 percent and asked for regulatory approval to buy more. Even after the move sparked a record rebound in Echo’s shares, the Brisbane-based company is still trading at 1.9 times sales, less than one-third the average for Asian gaming companies, according to data compiled by Bloomberg.