Crown shares spike on Sydney win

Crown's shares price rises following the NSW government's decision yesterday.

Shares in Crown Ltd spiked at the open following a decision by the New South Wales government to advance the group's proposal for a VIP facility at Barangaroo.

At the 1015 AEST official market open, Crown shares were 5.36% higher at $12.865, against a benchmark index rise of 1.18%.

Yesterday, the state government's decision pushed James Packer a step closer to shaking up the Sydney gaming market with a second casino after, while also dashing rival Echo Enterainment Group Ltd's attempt to maintain its casino monopoly in the city.

Premier Barry O'Farrell on Thursday progressed Mr Packer's proposal to the crucial third stage of the state government's unsolicited proposal process for major projects over a rival bid from Echo.

Mr O'Farrell stressed the approval for Crown's bid was "not a licence to build" but a licence to move to the next stage.

Mr Packer is proposing a $1.5 billion luxury hotel and VIP-only facility at Barangaroo, to rival Echo's The Star.

The NSW premier said the tax paid on the business would be 29%, higher than the 27.5% proposed by Crown in its bid.

Mr O'Farrell also flagged some provisions for Crown's VIP gaming business.

The parliamentary committee charged with assessing the proposals found Crown's contribution to gross state product and tax was 26% and 31% larger, respectively, than Echo's.

Mr O'Farrell said the unsolicited proposals of both Crown and Echo were welcomed by the NSW government, as they presented opportunities to increase the "econcomic prosperity" of the state.

The NSW government retained the right to renege on the agreement at any time because the bids were unsolicited.

Echo wanted to build two new hotels next to The Star and connect Pyrmont, Darling Harbour and Barangaroo into one integrated resort, while extending the company's right to be the state's sole casino operator for a further 15 years (see Cliona O'Dowd's Collected Wisdom).

The head of the independent panel reviewing the proposals, David Murray said there were "commonalities" in both proposals.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles