Genting still wants more of Echo
Market watch top headlines
Australian reports
- Aust markets: Aust shares rise ahead of US Fed meeting
- Aust dollar report: Dollar recovers as traders look to US
- Aust credit close: Aust bonds weaken ahead of US Fed meeting
World reports
- World commodities: Commodities markets summary
- World markets: International markets roundup
MELBOURNE, Sept 20 AAP
September 20 2012, 2:54PM
Genting Hong Kong says it still wants approval to acquire more shares in Australian casino operator Echo Entertainment Group even though its counterpart in Singapore has decided to sell its stake in Echo.
Genting Hong Kong and Genting Singapore are both part of Malaysian conglomerate Genting Group, which has interests in gambling, power generation, oil palm plantations, property development, and oil and gas around southeast Asia.
Genting Hong Kong and Genting Singapore became substantial shareholders in Echo in June 2012, together holding about 9.9 per cent of Echo's shares.
Echo's constitution and agreements with the NSW Independent Liquor and Gaming Authority and the Queensland Office of Liquor and Gaming Regulation restrict anyone from owning more than 10 per cent of Echo unless they gain permission to go above that limit.
Genting Hong Kong said in a statement lodged with the Australian Securities Exchange on Thursday that it had noted an announcement by Genting Singapore on Wednesday that Genting Singapore had decided to sell its 4.8 per cent stake in Echo.
"GHK (Genting Hong Kong) will continue to hold its investment in Echo Entertainment and remains committed to the application to the NSW Independent Liquor and Gaming Authority and Queensland Office of Liquor and Gaming Regulation for approval to acquire more than 10 per cent voting power in Echo Entertainment," Genting Hong Kong said in a statement.
Genting Singapore said on Wednesday that it had entered into an agreement with Citigroup Global Markets Australia to sell its Echo stake on the Australian Securities Exchange in a block trade at $3.99 a share.
Genting Singapore said it had decided to sell the Echo shares after a review by the company to rationalise its investments portfolio.
The James Packer-controlled casinos group Crown is also seeking permission from regulators to lift its stake in Echo, which currently is just under 10 per cent.
Crown has applied to regulators in NSW and Queensland for permission to lift its stake in Echo to up to 25 per cent.
Crown has been upgrading its casinos in Melbourne and Perth in a move to entice more high-rolling VIP gamblers from Asia, but wants a presence in Sydney where Echo operates the only casino, The Star.
Echo also operates casinos in Brisbane, the Gold Coast and Townsville in Queensland.
Mr Packer's Crown wants to build what it describes as the world's best hotel at Barangaroo in Sydney and is seeking to incorporate a VIP-only gambling facility into the hotel, which would require approval from the NSW government and gaming authorities.
Shares in Echo were 23 cents, or 5.61 per cent, lower at $3.87 at 1438 AEST on Thursday.
Morningstar analyst Michael Wu said Echo shares were falling as some of the value added to the stock by takeover speculation was wiped off.
"Genting selling down half their stake is a negative," Mr Wu said.
But Mr Wu said Genting lifting its share in Echo at some later time was still an option.
