Crown Resorts’ new chief executive Steve McCann says leasing out the group’s casinos is one option he will consider to salvage shareholders’ investments if the James Packer-backed group is stripped of its gambling licences.
The former Lendlease boss said in an interview on Friday there had been “a lot of inbound inquiry” from potential partners and buyers interested in Crown, and that all options would be on the table if royal commissions in Victoria and WA find it unfit to run its Melbourne and Perth casinos.
The licence for Crown’s new Sydney casino is already suspended after a NSW inquiry confirmed in February reports by this masthead that Crown had enabled money laundering at its other properties and had been infiltrated by organised crime syndicates.
“Clearly we have to anticipate a range of scenarios and be flexible enough to respond to the scenarios that are presented,” said Mr McCann, while declining to speculate about what he thought the likely outcome would be.
Crown has already become a takeover target this year. It rejected an $8.4 billion takeover bid from private equity outfit Blackstone in May. And its Sydney rival, The Star, also lobbed a $12 billion merger proposal in May but has since withdrawn the offer, citing uncertainty about the future of Crown’s licences.
Mr McCann, who was appointed Crown CEO in June but is still awaiting approval from gambling regulators, said there was broader interest in Crown’s assets. But the company’s focus was on retaining its licences and reforming the business, and only then would it look at structural options.
“There’s been a lot of inbound inquiry on a range of structures – some of them are public already,” he said.
Investors and analysts have turned their minds to how much Crown (which has a market value of $6.4 billion, down almost 30 per cent since early May) would be worth if it lost its licences and had to lease out its properties to another operator. Macquarie analysts this week put the figure at $4.8 billion to $5.2 billion, while JP Morgan said it would be worth $5.5 billion.