Singapore gaming operator Genting has announced it had taken a stake in Echo Entertainment, raising the prospect of a battle with billionaire rival James Packer for control of the $3 billion Australian casino company.
Packer, who wants to use Echo’s licence to build a new casino complex in Sydney to attract more Asian high-rollers, has been agitating for change at Echo after building a 10 per cent stake in the company, and last Friday succeeded in ousting the company’s chairman.
Analysts have speculated that Genting, south-east Asia’s largest gaming group, was preparing for an acquisition, having built up a war chest of $3.1 billion, declaring Echo’s Sydney casino (pictured left) would be the prize.
Genting, like its rivals such as Las Vegas giants Sands and MGM Resorts, are racing to dominate the Asian casino world – considered the most fertile ground for gambling with about $45 billion in annual revenue up for grabs.
“I don’t think they are going to work with Packer. Echo’s main asset is Sydney and there is no reason for either Packer or Genting to want to give up Sydney. Both of them are going to be fighting for Echo’s crown jewel,” an industry analyst told PokerMedia Australia.
A Genting spokeswoman declined to comment on whether the company was considering a takeover offer or disclose its stake, but Genting said in a statement the total value of its investment in publicly quoted securities was $234 million. It was earlier reported in The Australian that Genting had built up a 4.9 per cent stake in Echo, which runs Sydney’s Star casino and Jupiter’s on the Gold Coast.
Last Friday, Echo confirmed that its chairman, John Story, had resigned, bowing to a destabilising campaign run by Packer who wanted to sack the Echo chairman.
Genting Group, whose biggest assets are Malaysia’s Genting Highlands casino complex and Singapore’s S$6.6 billion Resorts World at Sentosa, also has stakes in Resorts World Manila and several UK casinos.
Genting missed out on a concession in Macau more than a decade ago and has been aggressively raising its game across the region, with its parent company planting itself in countries such as the Philippines and Vietnam to help it secure revenues in what are expected to be fast-growing emerging casino markets.
Packer, who has stakes in casinos in Australia, London and Macau, wants to increase his company Crown Ltd’s 10 per cent stake in Echo and win a board seat. Crown had put forward a resolution to remove Story at a July 20 shareholders meeting.
Crown, which had argued that Echo was underperforming under Story’s leadership, said in a statement on Friday that it would drop its call for a shareholders meeting.
Echo completed a costly AUD $870 million refurbishment of its Sydney Star casino last year. Crown owns casinos in Melbourne and in Perth, and about a third of Melco Crown Entertainment, which has casinos in Macau. It wants Echo’s casino licences in Sydney and the Gold Coast because they are more likely to attract Asian high rollers than Melbourne and Perth.
• Additional reporting from Reuters