James Packer Sells 19.9% of Crown Resorts Shares to Melco

Melco Buys Crown Shares from James Packer

James Packer, who was Lawrence Ho’s business partner for more than a decade, said he was “thrilled” Ho bought a 21% stake in Crown Resorts.

James Packer sold AU$1.76 billion of his stake in Crown Resorts to Melco Entertainment, a Macau casino group. The selloff amounts to 19.9% of James Packer’s stake in the company his father founded. Packer now owns 26% of Crown Resorts, a percentage value at $2.3 billion. The Aussie billionaire sold at $13 a share.

Lawrence Ho, the 42-year old son of the legendary Stanley Ho, owns Melco Entertainment and Resorts. Melco owns City of Dreams Macau, Altira Resort, and Studio City in Macau. The company also owns City of Dreams Manila in the Phillipines, while it’s building City of Dreams Mediterranean in Cyprus.

James Packer said Crown Resorts is a stronger company with Melco as a shareholder. He should know, because Crown Resorts was a shareholder in “Melco Crown” from 2004 to 2016.

That partnership fueled Crown’s rise in value and Australian casino dominance. Revenues poured in from Macau, as James Packer’s company owned 33% of Melco Crown. When the Macau gaming industry declined in mid-2014, Packer sold off part of Crown’s interest in the venture.

Crown’s Ties to Melco

Later, when Crown faced legal troubles in China, the board of Crown Resorts sold the remaining stake in Melco Crown. Lawrence Ho renamed the company Melco Entertainment and Resorts, which signaled his full control of the Macau giant.

Now the tables have turned as Lawrence Ho buys a large stake in Crown Resorts. Though James Packer no longer maintains a day-to-day role in Crown’s affairs, many longtime Crown execs have worked with Melco.

James Packer on Melco Buyout

For his part, James Packer said he is thrilled that Lawrence Ho and Melco bought into Crown Resorts. In a public statement, Packer said, “Crown has been a massive part of my life for the last 20 years and that absolutely remains the case today — my continuing Crown shareholding represents my single largest investment.”

The statement continued, “I am still vitally interested in Crown’s success as a world-class resort and gaming business. The sale allows me to continue my long-term involvement with Crown and at the same time to better diversify my investment portfolio.”

Lawrence Ho’s Global Ambitions

Lawrence Ho, who shares a similar background to James Packer, is making his move in the global casino business. Ho is planning a bid for an Osaka casino resort, hoping to secure a prime place in the world’s third-largest casino market.

Melco’s founder once said he would spend “whatever it takes” to win a Japanese casino license. Lawrence Ho said he would move Melco’s corporate HQ to Japan if he won a license. He also devised the MelGuard facial recognition system, which he offered to give to the Japanese government to help screen for problem gamblers.

Osaka Casino License

Ho’s bid for the Osaka license will be contested. The largest casino company in the world, Las Vegas Sands, also is in the bidding. So is MGM Resorts and Caesars Entertainment, two other American giants. The winning bid will be an $8 billion to $10 billion investment.

Osaka wants an integrated casino resort to fuel its already massive tourist industry. Lawrence Ho could be calculating that ties to Australia’s largest casino company might strengthen his bid in Japan. Access to customer databases helps in drawing in foreign gamblers, so Melco’s access to Aussie customers presumably would help Osaka’s tourist trade.

Of course, Melco’s biggest selling point would be a huge database of Chinese customers. Melco’s 15 years in the Macau casino industry assures that, but Las Vegas Sands and MGM Resorts also have Chinese customers. Thus, the stake in Crown Resorts is a way for Melco to stand out from the competition.

Packer & Ho: A Bond of Brothers

James Packer and Lawrence Ho have one thing in common: they’re the sons of legendary businessmen. James Packer is the son of the late Kerry Packer, the Australian media mogul. Kerry Packer also founded Crown, which James took over when his father died in 2005.

Lawrence Ho is the son of the 97-year old Stanley Ho, who owned a casino monopoly in Macua for 40 years. During the time when Portugal still governed Macau, it gave Stanley Ho’s SJM Holdings a monopoly in the city. Over the decades, the elder Ho became known as the “King of Gambling” in China. Lawrence Ho founded Melco Crown in partnership with Kerry Packer, but as competitors with SJM Holdings in Macau.