South Korean casino operator Paradise Co announced on Monday it will drop a deal to acquire a controlling stake in hotel company Parnas Hotel Co.
“We have conducted internal reviews after being picked as the preferred bidder, and we decided to withdraw from the bid,” Paradise said in a regulatory filing quoted by Yonhap news agency.
Last month, Paradise had been selected as the preferred bidder to acquire a 67.56 percent stake in Parnas Hotel, being disposed of by GS Engineering & Construction Co, one of South Korea’s leading builders.
The final bid for the stake was scheduled for later this month. The deal was estimated to be worth up to 900 billion won (US$890.6 million), according to Yonhap.
Paradise said it will instead focus on the development of its new “Paradise City” resort, 40 kilometres west of Seoul. The US$1.7-billion property will include hotels and restaurants, and a foreigner-only casino. The project, to be ready by 2017, is a joint venture with Japan’s Sega Sammy Holdings Inc.
Paradise currently runs five foreigner-only casinos in South Korea, namely in Seoul, Incheon, Busan and Jeju. The company said in its first quarter earnings statement that its casino drop had increased by 30.1 percent year-on-year, largely thanks to the contribution of Chinese high-rollers.
Korean casinos currently only permit foreigners to gamble, except at Kangwon Land, a difficult-to-access location 150 kilometres southeast of Seoul in Kangwon Province.
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"If the [Macau casino] concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos”
Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau