An announcement from Australian operator Crown Resorts that it would spin-off its international properties into a separate company was greeted by a sudden and dramatic leap in the value of its stock.
Crown’s press statement resulted in a 13 per cent rise in its share-price on the Sydney stock exchange by close-of-play on June 16, despite a broader market trend of marginal decline.
The company – in which billionaire James Packer remains majority shareholder – also said it was exploring a 49 per cent in a prospective trust which would consist of the majority of its Australian hotel portfolio.
Explaining the spin-off move, Crown chairman Robert Rankin said: “We believe that Crown Resorts’ high quality Australian resorts are not being fully valued and the Crown Resorts share price has been highly correlated to the performance of its investment in Macau.”
Crown recently downsized its stake in joint venture creation Melco Crown Entertainment – which operates Macau’s new Studio City resort alongside several other big-budget Asian ventures – to 27.4 per cent. The company’s other international assets include a 50 per cent hold in the UK’s Aspers casino chain and significant investments in the US landed casino industry – including both Caesars Entertainment and the upcoming Alon development in Las Vegas.