Melco agreed to buy a 20 per cent stake in Crown from Mr Packer for $1.76 billion in May, and said at the time it was interested in taking a controlling stake in the company.
The second half of the deal was put on hold when the NSW gambling regulator launched an unprecedented public inquiry into probity issues involving Crown and Melco.
That includes whether the share sale breached the terms of Crown’s licence for the casino it is building at Sydney’s Barangaroo which bans Melco boss Lawrence Ho’s father, Stanley Ho, and associates from any involvement in Crown due to alleged links to organised crime.
On Thursday night Melco said it had no plan to increase its stake from the 10 per cent it already owned. Mr Packer will be left with a 36 per cent stake in Crown.
Anton Tagliaferro, investment director at Investors Mutual, which owns close to $13 million of Crown shares, said Melco’s retreat could open the door for other suitors to come knocking.
“If anything else it’s shown that Consolidated Press is a willing seller at the right price, and given Crown’s dominant position in Australia and its strong balance sheet, I would have thought that it’s back in play now,” he said.
Mr Tagliaferro said that included US group Wynn Resorts, which in early 2019 was in talks to buy out Crown reportedly at $14.75 a share, above the $13 a share Melco paid Mr Packer for its shares a month later.
What ultimately happens to Melco’s remaining 10 per cent stake would be the key to any future takeover, said Jason Beddow, managing director of Argo Investments, which owns about $30 million in Crown shares.
“Are they still there with 10 per cent or not, which is still enough of a blocking stake, and then ultimately do they want to be there at all?” he said.
“We’re pretty sure that Packer is a seller – there’s no issue about that. But on the other side who knows how that plays out and what Melco’s intention is?”
Mr Beddow said Wynn’s proposed buyout showed there were clearly some in the market who saw value in the company above the $13 a share Melco paid Mr Packer for its shares.
However, the tightening VIP gaming market and the coronavirus crisis meant nobody would be looking to buy a casino right now, he said. Any potential suitor – including Melco – would wait until the NSW probity inquiry is completed and Crown’s Barangaroo casino opens early next year.
Crown and fellow casino group Star Entertainment’s shares have fallen sharply since the outbreak of the coronavirus on fears the crisis will hit patronage from Asian VIP gamblers.