Recently appointed Crown Resorts CEO Steve McCann says the company would consider leasing out its casinos to other operators should it be found unsuitable to retain its licenses in Victoria and Western Australia.
But such an option is seen as among the least desirable with Crown still hopeful it will either be found suitable or be given a chance to achieve suitability when Royal Commissioner Ray Finkelstein hands down his findings from the Victorian Royal Commission in October.
McCann’s comments, published in The Sydney Morning Herald, follow the release of Crown’s FY21 financial results last week which saw the company fall to a loss of AU$261.6 million (U$191.2 million).
It was also revealed that talks with American global asset management firm Oaktree Capital Management LP over the acquisition of Crown shares had ceased due to growing uncertainty around the company’s future.
Asked about the prospects of leasing one or all of Crown’s casinos in Melbourne, Perth and Sydney to an outside operator, McCann told The SMH, “Clearly we have to anticipate a range of scenarios and be flexible enough to respond to the scenarios that are presented.
However, “That scenario would be sub-optimal for everybody because operating an integrated resort … is better achieved with everything together. It’s not an ideal scenario but it’s not something we’d rule out if we have to head in that direction.”
McCann also insisted there was still interest in Crown and the value of its assets despite talks breaking down with Oaktree and other bidders.
Oaktree, which had proposed a deal by which it would fund the purchase by Crown of the 37% stake owned by James Packer’s Consolidated Press Holdings, was one of three firms to have publicly expressed an interest with Crown alongside US hedge fund giant The Blackstone Group and fellow Australian casino operator Star Entertainment Group.
Crown rejected Blackstone’s offer of a full takeover in May while Star withdrew its merger proposal in July, outlining its concern that “issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the license to operate its Melbourne casino or the conditions under which its license is retained.”
McCann said Friday, “There’s been a lot of inbound inquiry on a range of structures – some of them are public already,” but insisted how any such structuring might look in the future depended on the outcome of the Royal Commission.
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