Wednesday, December 12, 2007

Packer ups ante in US

JAMES Packer's newly minted Crown gaming business has splashed out $2 billion on its first casino purchase in the US, less than two weeks after the company was split from the Packer media arm.

Crown said the $US1.5 billion ($A2 billion) acquisition of Cannery Casino Resorts, which is part-owned by Crown Casino's former chief operating officer, Bill Paulos, would add to earnings per share as soon as the deal was completed.

The deal includes four casinos in Nevada and western Pennsylvania in the US, as well as two casino complexes being built by Cannery.

Of the two new venues, the $250 million East Side Cannery Casino in Las Vegas is scheduled to open in September 2008. It will include a 6040-square-metre casino with 2000 slot machines and 26 table games as well as 307 hotel rooms.

Cannery is also building a permanent structure for the Meadows Racetrack and Casino in Pennsylvania, expected to be completed in April 2009.

Once these properties are completed, Cannery will operate about 8400 slot machines, 75 gaming tables and 720 hotel rooms across its properties.

However, the deal is not expected to be completed for about a year, as Crown awaits regulatory approvals from bodies including the Nevada Gaming Commission, the Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing Commission before it can own and operate Cannery's assets.

Crown will pay for the acquisition with its cash reserves.

Cannery is 58% owned by Millennium Gaming, a joint venture between former Crown employee Mr Paulos and Bill Wortman, with the rest held by buy-out firm Oaktree Capital Management, which bought a stake in 2006.

Cannery has developed its venues as "locals" casinos, with the aim of attracting local people rather than tourists.

In a statement to the market, Mr Packer said the casinos were "first-class 'locals' properties located in markets with attractive, long-term growth prospects". "Crown's skills and experience in operating successful 'locals' casinos will enable us to grow the CCR business further," he said.

Crown chief executive Rowen Craigie told the market the acquisition presented the company with "high-quality new or near-new facilities without exposure to construction risk and without high capital-expenditure requirements".

Crown said the final price would be adjusted for the timing of the regulatory approvals and any delay or cost blow-outs in the new constructions.

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