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US recession kills Packer's casino plan
By Robert Fenner |
March 14, 2009, Saturday
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Print Edition
Print Edition
BILLIONAIRE James Packer yesterday scrapped a US$1.75-billion takeover of Cannery Casino Resorts LLC and sold his Australian cattle ranches to Guy Hands' United Kingdom buyout company, Terra Firma Capital Partners Ltd.
Packer's Crown Ltd, Australia's biggest casino owner, rose by a record 13.5 percent in Sydney trading yesterday after calling off the deal to buy United States-based Cannery, which would have given it three Nevada casinos and the Meadows racetrack near Pittsburgh.
Packer, 41, whose fortune shrank more than half last year according to Forbes magazine, abandoned the takeover after the US recession slashed gambling revenue and Crown lost 56 percent of its market value last year.
Credit markets have frozen since the agreement was struck in December 2007, making it more costly to finance takeovers, Bloomberg News reported.
"Anyone who is looking to borrow to buy an asset, particularly one whose value was set before the economic meltdown, has not been viewed kindly by investors," said Sean Fenton, who manages about US$324 million at Tribeca Investment Partners in Sydney. "Some investors have been waiting for a resolution to this deal before getting back into the stock."
Crown shares surged 13 percent to close at A$5.90 in Sydney trading, the biggest increase since Packer split his gambling and broadcasting assets into separate companies - Crown and Consolidated Media Holdings Ltd. The stock was worth A$14.19 when it first started trading on December 12, 2007.
The benchmark S&P/ASX 200 Index increased 3 percent yesterday.
Packer's Crown Ltd, Australia's biggest casino owner, rose by a record 13.5 percent in Sydney trading yesterday after calling off the deal to buy United States-based Cannery, which would have given it three Nevada casinos and the Meadows racetrack near Pittsburgh.
Packer, 41, whose fortune shrank more than half last year according to Forbes magazine, abandoned the takeover after the US recession slashed gambling revenue and Crown lost 56 percent of its market value last year.
Credit markets have frozen since the agreement was struck in December 2007, making it more costly to finance takeovers, Bloomberg News reported.
"Anyone who is looking to borrow to buy an asset, particularly one whose value was set before the economic meltdown, has not been viewed kindly by investors," said Sean Fenton, who manages about US$324 million at Tribeca Investment Partners in Sydney. "Some investors have been waiting for a resolution to this deal before getting back into the stock."
Crown shares surged 13 percent to close at A$5.90 in Sydney trading, the biggest increase since Packer split his gambling and broadcasting assets into separate companies - Crown and Consolidated Media Holdings Ltd. The stock was worth A$14.19 when it first started trading on December 12, 2007.
The benchmark S&P/ASX 200 Index increased 3 percent yesterday.
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