Bloomberg News

Harrah’s Seeks Crown Stake in Macau, Analyst Says

February 01, 2010

Harrah’s Entertainment Inc. (CZR:US), the world’s biggest casino company, may seek to acquire Crown Ltd. (CWN)’s stake in Melco Crown Entertainment Ltd. (MPEL:US) to gain gambling assets in Macau, according to David Bain an analyst at Sterne, Agee & Leach Inc.

Lawyers for Macau Chief Executive Fernando Chui Sai-On have been asked to examine a potential transfer of shares to Harrah’s from Crown, wrote Bain, a Sterne Agee analyst in Woodland Hills, California. Melbourne-based Crown owns more than a third of Hong Kong-based Melco Crown.

Harrah’s wants to bring its Caesars Palace brand to Macau, where it owns a golf course, as it seeks new markets for growth, Chief Executive Officer Gary Loveman said in an interview last year. Melco Crown owns two venues in the only place in China where casinos are legal.

Anthony Klok, a spokesman for Crown, declined to comment to Bloomberg News on the report, citing company policy not to respond to “speculation.”

Any move by Harrah’s into the Macau market would require it to work with an existing operator because the government has limited the number of licenses to six.

Other holders of permits include U.S. companies Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Mirage. The remaining operators are Galaxy Entertainment Group Ltd. (27) and SJM Holdings Ltd., both based in Hong Kong.

“The Chinese Government may be reluctant to have a fourth American gaming company with large interests in Macau,” Bain said in the Jan. 28 report, affirming his “buy” rating on Melco Crown. “It is notable that Crown itself is a foreign entity to China.”

Crown shares fell 0.8 percent to A$7.70 at the close of trading in Sydney. The benchmark S&P/ASX 200 index fell 1 percent to 4,524.1.

To contact the reporter on this story: Robert Fenner in Canberra rfenner@bloomberg.net

To contact the editor responsible for this story: Iain Wilson at iwilson2@bloomberg.net


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Companies Mentioned

  • CZR
    (Caesars Entertainment Corp)
    • $13.44 USD
    • 0.00
    • 0.0%
  • MPEL
    (Melco Crown Entertainment Ltd)
    • $28.36 USD
    • -0.32
    • -1.13%
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