Wednesday, January 20, 2021 Contact us

Casino operator ‘Melco’ pull off Crown deal as Coronavirus hits travel

Casino operator Melco pull off Crown deal as Coronavirus hits travel

Casino operator Melco Resorts & Entertainment Ltd (MLCO.O) has dropped down a stake purchase from Australia’s Crown Resorts Ltd (CWN.AX) regarding decreasing number of travelers and casino closure due to onset of Coronavirus.

Melco which was a U.S. listed operator dropped the second tranche of a 19.99% buy-in of Crown from billionaire James Packer. The earlier buy-in valued at a$1.76 BILLION ($1.19 billion).

Macau to suspend its own casino operators for two weeks

The world’s biggest gambling hub, Macau, has also asked all its casino operators to suspend operations for two weeks because of the deadly virus which has brought the world to great fear. Macau which comes under the Chinese territory has so far reported 10 cases of Coronavirus.

Several flights have been cancelled and various companies are closing their stores and factories, all of this having a bad impact to the world’s second –largest economy and key source of international gamblers.

Even if keep aside the virus thing, the deal has been far from plain sailing after concern were raised by regulators over links with Stanley Ho, Lawrence Ho’s father, who was previously under investigation by authorities in Australia and the United States.

An alleged criminal activity found at Crown’s Australia operations

In the previous year, Packer froze the partial sale in the month of August, pending an investigation into alleged criminal activity at Crown’s Australia operations.

However, Melco, that currently holds a stake purchase of 9.99 per cent and is planning for a seat on the Australian company’s board.

The portfolio manager of Tribeca Investment Partners, Jun Bei Liu said, “I think them not going ahead with the second tranche, it does not make people question whether they’re a seller of the first trance.”

Well, on February 19, when Crown reports its half-yearly earning result, it will sure have a great impact on investors for the drop in visitors from China. And with a transition toward core investment, Melco will surely shift its focus on Macau, the Philippines and Cyprus while still trying to achieve the license in Japan.