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James
Packer Scraps Cannery Casino Resorts Crown Casino
Deal - 13th March 2009
(Credit:
Gambling911)
Australian billionaire James Packer
has a $1.75 billion takeover of Cannery Casino
Resorts LLC and sold his Australian cattle ranches
to Guy Hands U.K. buyout company, Terra Firma
Capital Partners Ltd. Packer's Crown Casino enterprise,
Australia's biggest, rose 13.5 percent on the
news. Had the deal gone through, Packer would
have obtained three Nevada casinos and a racetrack
near Pittsburgh.
The
41 year old Packer's fortune shrank to half this
past year according to Forbes Magazine. Crown
lost 56 percent of its value and the Las Vegas
casinos are not faring that much better.
"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 $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."
Australian
media has been especially hard on Packer as of
late, claims Media
Man Greg Tingle.
Insiders
close to the James Packer situation almost universally
agree that he appears to have made two main business
mistakes," Tingle told Gambling911.com last
week.... "The One.Tel telco fiasco in Australia
back in 2001. One.Tel was a 1 billion dollar mistake.
The other more recent mistakes being buying land
based casinos in the Macau region (at top dollar),
but James was not to know the ass would fall out
of the market. Some analysts say some of the casino
investments are worth next to nothing. Hang on,
wouldn't James Packer be paying people good advice
on what to buy, what not to, and how much to pay?
Packer didn't have a luxury of a crystal ball.
"The
good news for Packer and the rest of us is that
history shows us that global recessions don't
last forever, or do they? The global economy has
been punishing Packer for the past few years and
it's largely matters which are outside his control,
so I think the Australian's press should give
him a break and try to reflect a more balanced
approach to journalism in regards to covering
the business of being James Packer."
The
Cannery deal was part of more than $3 billion
of North American gambling-industry acquisitions
Packer has made since inheriting Australia's biggest
fortune when his father died in December 2005.
Cannery
is controlled by Bill Paulos and Bill Wortman's
Millennium Gaming Inc. and Oaktree Capital Management
LLC.
According
to Bloombert, Crown will pay a termination fee
of $50 million, which may go up to $250 million
if it doesn't get regulatory approval to call
off the deal. The casino operator will also pay
Cannery $320 million to subscribe for a preferred
instrument that could be converted into a 24.5
percent holding.
Packer's
company will have the option over a two-year period
to buy the rest of Cannery on the same terms as
the original agreement, the gambling company said
in a statement today.
Crown
scrapped the deal less than a month after posting
a first-half loss triggered by writedowns to its
U.S., Canadian and U.K. casino investments.
Packer
slashed the value of stakes in Harrah's Entertainment
Inc., Station Casinos Group and Aspinalls by 90
percent as recessions in North America and Europe
curbed gambling demand.
Profiles
James
Packer
Crown
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