Wire ASIA & OCEANIA
Blackstone Leads Pack for Crown Resorts
Blackstone’s offer for Crown Resorts was sweetened to A$8.87bn, making the US private equity firm the front-runner backed by the Crown Board.
A revised bid from Blackstone is being recommended to shareholders by the Crown Resorts Board of Directors.
AUSTRALIA LAND-BASED
SINGAPORE– Marina Bay Sands and Resorts World Sentosa are both expected to see delays to their development projects. Singapore’s Minister of State for Trade and Industry, Alvin Tan, said both Marina Bay Sands, which is owned by Las Vegas Sands Corp, and Resorts World Sentosa had indicated potential for delays in the completion of their expansion plans due to Covid-19 pandemic- related disruptions in the construction industry.
Both resort areas announced expansion plans in 2019, including adding a fourth tower to the Marina Bay Sands development and a 1,500-seat entertainment area. Resorts World Sentosa, which is owned by Genting Singapore Ltd, anticipated adding Minion Park and Super Nintendo World to Universal Studios Singapore, as well as adding an oceanarium.
The Marina Bay Sands resort and casino extended the deadline for it to submit certain details of its S$4.5 billion (US$3.32 billion or about RM13.94 billion) expansion plan until the end of March, citing a filing with the US Securities and Exchange Commission.
SINGAPORE – Maybank IB Research believes the collapse of the junket sector in Macau could have a detrimental affect on the two casinos in Singapore who will be subjected to increased competition for premium mass players with casinos in the Philippines and Cambodia also affected.
Maybank Analyst, Samuel Yin Shao Yang, said: “We fear that the IRs in Macau, Philippines and Cambodia will target the premium mass gamblers that frequently gamble in Singapore. These IRs will have to fill the large gap left by the formerly junkets driven VIP market. As it is, the Macanese IRs are already fighting to attract Chinese premium mass gamblers and will target Southeast Asian premium mass gamblers who frequent Singaporean IRs when borders reopen. We have heard the same from Philippine and Cambodian IRs.”
“The gaming tax [Singapore’s casinos are facing increases of 15 to 18 per cent] and GST rate hikes will work against RWS (and MBS),” Yin said. “IRs in the Philippines and Cambodia which have a similar, if not lower, tax regime can offer higher rebate rates to Southeast Asian premium mass gamblers who frequent Singaporean IRs to attract them.
“IRs in Macau may not be able to do the same due to their much higher tax regime. Yet, we gather that they can offer superior accommodation. We gather that the most intense competition will come from Cambodia’s NagaWorld due to its low tax regime and familiarity to Southeast Asian, mainly Malaysian, premium mass gamblers.”
P24 WIRE / PULSE / INSIGHT / REPORTS
Te board of Australia's biggest casino operator, Crown Resorts, is backing a buyout proposal from US private equity firm, Blackstone, after the offer was sweetened to A$8.87bn ($6.46bn).
Te buyout firm, which already owns 10 per cent of Crown, lifted its bid to A$13.10 per share, from a November offer of A$12.50, and is likely to be accepted unless a higher offer emerges.
Crown has said it will now engage with Blackstone after describing its previous bid as "uncompelling" and will recommend to shareholders that the bid be accepted.
Te deal comes after Crown was found to be unsuitable to operate its Sydney casino and given two years to address a catalogue of issues related to its Melbourne casino, including tax and anti-money laundering problems.
Te revised offer puts Blackstone as the front- runner to win control of Crown and there are signs that the deal might be struck by the end of January.
An agreement to sell to Blackstone would also
Genting Hong Kong defaults on US$2.7bn shipyard debt
Hong Kong
Genting Hong Kong faces an immediate debt payment of US$2.78bn after the unit filed for bankruptcy at the start of January, as a bailout by the German government fell through.
Genting Hong Kong’s Werften shipyard filed for insolvency as it ran out of cash during the construction of the Global Dream, a cruise ship with the capacity for 5,000 people. A €600m (US$678m) bailout plan that required Genting Hong Kong to put up 10 per cent of the capital fell through.
Te cross-default triggered would cause a material adverse effect on its business operations, prospects, and financial condition, Genting said in a statement to the Hong
offer Crown’s biggest shareholder, James Packer, an exit from the company in which he owns around 36 per cent of shares, but who has retreated from corporate life in recent years to deal with mental health issues.
Te deal requires approval from casino regulators in three Australian states and a shareholder vote, but could theortically be completed by the end of June.
Crown shares rose nine per cent on the news of the revised Blackstone offer to A$12.68, their highest price since June 4, but still below Blackstone's offer indicating market doubt about a rival bid.
Blackstone made its first approach for Crown Resorts in March last year, with an initial offer of A$11.85. Tat and a subsequent offer in May were rejected by the Board as too low. In July, rival Australian casino operator Star Entertainment Group scrapped a merger proposal with Crown, while an offer from Oaktree Capital Management LP to fund the buyout of Packer’s stake also didn’t make the grade.
Kong stock exchange, where its shares are traded. Te board, headed by Malaysian billionaire Lim Kok Tay, is discussing with bankers and professional advisers “to evaluate options available to the company,” Genting added.
Genting stock has lost half its value since 2018, with US$766m of capitalisation wiped out, as the global cruise and tourism industry became the biggest casualty of the Covid-19 pandemic.
“Cruise lines, related to the tourism businesses, were hard hit by the coronavirus outbreak and many of them cannot survive without financial support from the authorities or their shareholder,” said Lu Ming, an agent at Shanghai Ocean Shipping Agency. Te industry's largest company, Carnival, reported losses of $10bn (£7.4bn) in 2020 after revenues fell 73 per cent during the pandemic.
Macau
A ‘more normalised 2023’ will see Macau’s casino sector produce EBITDA similar to pre- pandemic levels, with mass gaming surging passed 2019’s figures by 15 per cent to make up for a continued downturn in VIP gaming, according to analysts at Sanford C. Bernstein.
Vitaly Umansky, an analyst at the ratings agency, said overall revenues will be back up to just over 80 per cent of pandemic although VIP gaming will be low at 28 per cent of 2019 revenues.
“VIP will remain a fraction, [on 2019’s figures] largely on Direct VIP, with likely some junket agent business as well, but we assume no junket run room operations returning.”
Tis year is likely to see GGR increase to 44 per cent of pre- COVID levels with mass gaming at 66 per cent and VIP at just nine per cent.
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