GGRAsia – Melco delays second tranche of Crown shares deal

Melco delays second tranche of Crown shares deal

Aug 28, 2019 Newsdesk Latest News, Macau, Top of the deck, World

Casino developer and operator Melco Resorts and Entertainment Ltd says it is delaying the acquisition of a second tranche of shares of Australian gaming operator Crown Resorts Ltd. The company and the seller of the Crown Resorts shares – CPH Crown Holdings Pty Ltd – have agreed to postpone the completion of the deal while an inquiry into the transaction is being conducted by authorities in Australia, said Melco Resorts in a Wednesday press release.

The New South Wales Independent Liquor and Gaming Authority announced earlier this month that it was launching an investigation to probe the “change in state of affairs” of Crown Resorts, including the US$1.2-billion bid from Melco Resorts to acquire a 19.99-percent stake in the Australian casino firm.

Melco Resorts had said in a statement to GGRAsia that it would participate “in any probity review process and cooperate with any inquiry” that was required in relation to its investment in Crown Resorts.

Crown Resorts runs a gaming resort (pictured) in Melbourne, Victoria; one in Perth, Western Australia; and is developing a third at Barangaroo in Sydney, New South Wales.

Under the original agreement between Melco Resorts and CPH Crown Holdings, the closing of the first tranche of 67,675,000 shares – equivalent to a nearly 10 percent stake – of Crown Resorts occurred on June 6. The closing of the second tranche was scheduled to occur on or prior to September 30.

Melco Resorts said in Wednesday’s release: “The company and CPH have agreed to allow more time for the relevant Australian regulatory processes to be completed before completing the acquisition of the remaining 67,675,000 shares of Crown.”

Under the amendment now announced, the acquisition of the remaining shares has been deferred “for a period of up to 60 business days following the completion of the relevant Australian regulatory processes”.

Melco Resorts said additionally that if the closing of the second tranche of Crown Resorts shares occurs after September 30, the purchase price of such shares will be reduced by an amount equal to any dividends received by CPH Crown Holdings between June 6 and the completion of the deal.

But the price will increase by AUD0.05 (US$0.034) per share per calendar month following September 30, until the closing of the deal, it added.

Melco Resorts warned that the acquisition of the remaining shares of Crown Resorts is subject to certain conditions. Those include the completion of the relevant regulatory processes with no restriction, objection, or conditions considered unreasonable by Melco Resorts or CPH Crown Holdings, imposed as a result of the inquiry by the New South Wales regulator, it stated.