Melco halts Crown share purchase amid Coronavirus outbreak

Operator abandons purchase of second tranche of Crown shares due to regulatory investigation and Coronavirus.

Australia.- Melco Resorts & Entertainment Limited has stopped the second half of its purchase deal for a 20 percent share in Crown Resorts Limited. The company said the ongoing Coronavirus outbreak was the main reason for its decision.

“Due to the impact of the Coronavirus epidemic, including the severe drop in tourism in Asia to integrated resort facilities in the region, and the recent decision by the government of the [Macau SAR] to close all casinos in Macau, Melco Resorts has taken the decision to reassess all non-core investments to be made in 2020,” the company explained.

Melco was in the process of acquiring 135.35 million shares in Crown Resorts from CPH Holdings – the family investment company of James Packer – for US$1.22 billion (MOP9.8 billion).

The payment was to be made in two tranches, with the first 9.99 percent company share purchase closing on June 6, 2019.

The second 9.99 percent tranche purchase was expected to close on or prior to September 30, 2019, but it was stopped by an inquiry imposed by Australian gaming authorities.

“Melco Resorts intends to continue its operations in these jurisdictions and carry out key investments currently earmarked for Macau, Manila, Cyprus, and Japan, including the construction of Studio City phase 2 and City of Dreams Mediterranean,” the operator noted.

“For the above reasons, Melco Resorts decided not to pursue its planned investment in Australia for the Second Tranche Shares. While Melco Resorts believes Crown Resorts has world-class assets that are complementary to its global business, it is Melco Resorts’ belief that, at this time, its capital needs to be deployed on its core assets.”