Crown slumps as Packer sells down his stake
Stock
Crown Resorts (CWN) $12.27 as at 31/05/2019
Event
Shares in the casino owner Crown have taken a hit today after James Packer, Crowns biggest shareholder sold a 19.9% stake for $13 to Hong Kong based Melco Resorts.
The US listed Melco paid a total of $1.76b for the shares at a slight premium to yesterday’s close. Shares are now trading around 5% lower on the day as speculation builds on both Melco’s intentions for Crown, and Packer’s intentions with his remaining ~26% stake.
Crown was recently in the press being courted by US giant Wynn which began the rumours that Packer was looking for an out. Melco could be a serious contender to launch a bid, although played down that theory in an announcement to shareholders. For mine, it would be odd to pick up such a large stake without some greater intention behind it.
The problem for shareholders in the shorter term is that there appears to be a large seller on the register. As much as Packer says the remaining shares are not up for sale, he has no obligation to hold them and institutional investors are unlikely to look at hoovering stock until this overhang of supply is dealt with.
Crown (CWN) Chart
Market Matters Take/Outlook
