Asian casino operator Genting Singapore has sold its entire 4.8% stake in Australian gambling company Echo Entertainment Group. Singaporean gambling news sources value the deal to be about 131.7 million Australian dollars, or $137.5 million in American money.
As a part of the Malaysian gambling giant group, Genting operates the Resorts World Sentosa casino in the Asian city-state according to the Singaporean gambling laws. The firm has announced in a filing to the Singapore Exchange on Wednesday the intention of selling its 39.6 million Echo shares through a block trade at AUD 3.99 per share. Citigroup is reported to have handled the block trade.
Genting, an advocate of legalized internet betting in Singapore, named rationalizing its investment portfolio as the substantial reason behind the sale. Genting Singapore bought its stake at a price around or above AUD 4.15, therefore yesterday’s sale would be considered a definite loss.
However, it is rumored that the real aim of transaction was to simply hide the transfer from one arm of the company to the other from the strict related-party transaction rules.
Genting Hong Kong has earlier sought Australian regulatory approval in New South Wales and Queensland to increase its stake in Echo beyond 10 per cent.
The market speculates that Genting is planning a takeover of Echo, or trying to block a similar buy-out bid from Australian billionaire James Packer’s Crown Limited. Crown Ltd plans a new hotel and casino in Sydney. Echo holds an exclusive license to operate land casinos until in the city and in whole New South Wales 2019.