James Packer’s casino business Crown has emerged as a frontrunner to buy $2.4 billion US casino group Ameristar Casino, which owns eight casinos across North America.
James Packer’s casino business Crown has emerged as a frontrunner to buy $2.4 billion US casino group Ameristar Casino, which owns eight casinos across North America.
Ameristar has become the subject of takeover speculation since the death of its chief executive and controlling shareholder Craig Neilsen late last year.
After speculation about a possible Crown bid appeared in a US gaming journal, UBS analyst Sam Theodore issued a note to clients yesterday looking at whether Crown could handle the deal.
He believes Ameristar would fit well with the Cannery Casino Resorts business, which Crown bought for $1.5 billion last year. Theodore argues Crown could bid for the business with a joint venture partner or sell some property assets to launch its own bid.
Despite being seen as defensive and stable stocks, casino companies have been sold off by investors worried about the high level of debts within many of these companies. Crown’s shares have fallen from around $14 at the start of the year to around $8.60, while the Nasdaq-listed Ameristar has dropped from $US27.54 to $US13.54.
But the sharp falls in casino stocks could also create the opportunity for another round of industry consolidation.
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