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Land-BasedCasinoMergers & Acquisitions

Leasing casinos a viable option for Crown Resorts' lost licences

Steve McCann, CEO for Crown Resorts, is considering leasing out the group’s casinos to James Packer's company in case it loses its gambling licences.

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Crown’s new Sydney casino licence is already suspended after a February investigation showed the casino had been infiltrated by organised crime syndicates, which enabled money laundering.

“Clearly we have to anticipate a range of scenarios and be flexible enough to respond to the scenarios that are presented,” said Mr McCann.

As McCann is awaiting approval for Crown from gambling regulators, the group has caught the attention of investors who wonder how much it would be worth if it lost its licences and had to lease out its properties.

According to Macquarie Analysts, the current market value of the Crown is considered to be at $4.8bn to $5.2bn, down almost 30% since early May.

The Star, Crown’s Sydney rival, had proposed a $12bn merger in May, but because of the uncertainty regarding the future of the group’s licences, the merger proposal hwas withdrawn. Crown had also rejected an $8.4bn takeover bid from Blackstone in May.

As the group’s future is uncertain, Ziggy Switkowski, Crown’s incoming Chairman, is facing calls to resign from his position as chancellor of Melbourne’s RMIT university; this is happening because his new role at the gambling group is considered incompatible with the values of the university.

Dr Switkowski was appointed Crown’s new Chairman last week, to replace former Howard Government Minister Helen Coonan, who was serving as both Chair and CEO.


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