Billionaire James Packer is re-exerting control of his Australian casino operator that’s seen its international ambitions clipped after a Chinese clampdown put overseas revenue at risk.
Packer will return to the Crown board, while removing Robert Rankin as Crown chairman and chief executive officer of the businessman’s privately held investment company, Consolidated Press Holdings Pty, according to a filing by Melbourne-based Crown yesterday. Consolidated Press is Crown’s controlling shareholder.
Since Packer stepped down as a Crown director in Dec. 2015, the company has more than halved its stake in Macau casino operator Melco Crown Entertainment Ltd., ditched a proposed development in Las Vegas and abandoned a spinoff of international assets. That proposed spinoff had been complicated by a clampdown by Chinese authorities in October, when 18 Crown staff were detained for alleged gambling crimes.
“Crown has some really big hurdles to jump over in the next few years,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne. “It’s known that Packer has not been impressed with what has happened since he stepped aside.”
Back on the board, Packer is now closer to Crown’s management as it gauges the extent of the crackdown on overseas casino operators in China. It’s still not clear if any of the detained Crown workers will be jailed. At the same time, Crown is pushing on with a planned AUD2 billion (USD1.5 billion) high-stakes, luxury gaming resort in Sydney.
Crown shares fell as much as 2.1 percent to AUD11.48 in Sydney, the biggest intraday decline in more than three weeks and valuing the company at AUD8.4 billion. The stock has fallen for the past three years, its worst run since listing in 2007.
The top-level reshuffle reflects Crown’s almost sole focus on its Australian resorts and development projects in Australia.
Packer, who lured Rankin from Deutsche Bank AG a little over two years ago, said it made sense for him to step aside as chairman given the casino firm’s change in geographic focus. Rankin, who has been based in London and Hong Kong for the past 16 years, will be replaced at the head of Crown’s board by deputy chairman John Alexander on Feb. 1.
Packer had stepped down as a director of Crown amid speculation he was closer to a deal to take some of the company’s casino assets private. That was just months after he’d quit as chairman.
Guy Jalland will become CEO of Consolidated Press. Rankin will remain as a Crown director and a director of Melco Crown. Angus Whitley, Bloomberg