Genting partly sells down Echo stake

19 Sep 2012, 7:51 pm   -   Source: AAP

Genting sale opens the door for a fresh tilt at Echo by rival Crown, controlled by billionaire James Packer

The battle for control of Echo Entertainment group, the operator of Sydney's only casino, has taken a new twist with Malaysia's Genting selling down half its 10 per cent stake.

Genting, which operates casinos in South East Asia, told the Australian stock exchange that it had "entered into an agreement with Citigroup Global Markets Australia Pty Ltd to dispose of the company's entire 4.8 per cent shareholding" in Echo Entertainment Group at $3.99 a share.

The 'entire' stake referred to by Genting in the notice, published after the close of sharemarket trading, is equal to about half its actual 10 per cent stake on the Echo share registry.

The shares, which have a value of $A158 million, will be sold as one block of 39.6 million shares on the Australian Securities Exchange.

The sale price compares with Echo's closing price on Wednesday at $4.10.

Genting said the sale came after a review by the company to rationalise its investments portfolio.

The James Packer-controlled rival casinos group Crown, which operates casinos in Melbourne and Perth, has amassed a 10 per cent stake in Echo, which operates The Star casino in Sydney, and has sought regulatory approval to go to 25 per cent.

Echo also operates casinos in Brisbane, the Gold Coast and Townsville in Queensland,

Echo in August reported a net profit for the 2011/12 financial year of $42.2 million, well down on the prior year's net profit of $226 million.

Echo had spent $870 million redeveloping its main asset, The Star, including a $100 million payment to the NSW government for exclusivity.

Mr Packer's Crown has been lobbying the NSW government to build another casino in Sydney at the Barangaroo redevelopment near the CBD, just across the harbour from The Star.

Efforts to contact Echo and Genting by AAP on Wednesday evening were unsuccessful.

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