Echo takeover battle coming?
By Mike King - October 9, 2012
Malaysian casino operator, Genting, has lifted its stake in Echo Entertainment Group (ASX: EGP) back above 5%, but it’s unknown if the company was behind several big trades in Echo over the past few days.
Genting picked up 1.9 million shares in Echo last Thursday, but stockbroker RBS had attempted to buy around 40 million shares, or 5% of Echo’s stock, for a mystery buyer, after the market closed. Both Genting’s Singapore and Hong Kong divisions have been active in Echo share trading, with the Hong Kong division stating last month that it intended to lift its stake in Echo above 10%, if permitted by regulators. The Singapore division recently sold off its whole shareholding in Echo.
Genting Hong Kong has applied to buy up to 25% of Echo, the same level that James Packer’s Crown Limited (ASX: CWN) is seeking. What Genting’s game is. no-one really knows. Speculation is rife that it could be a potential bidder for all of Echo, in competition with Crown. Genting could also be looking to partner with Crown to take control of Echo, and potentially split up Echo’s assets. Some analysts have speculated that Genting is after a stake in Crown’s Macau casino, and using its shareholding in Echo as a bargaining chip.
The jewel in the crown (sorry!) is Echo’s Sydney casino licence. Crown is planning to build a six-star hotel and casino complex at Barangaroo, on Sydney’s foreshore, but Echo holds the only casino licence in Sydney. The company also owns casinos in Brisbane and the Gold Coast.
James Packer is in the process of selling his 50% stake in Consolidated Media Holdings (ASX: CMJ), with the proceeds likely to be used to lift his stake in Crown and Crown’s stake in Echo. News Corporation (ASX: NWS) has submitted a bid for Cons Media, but needs approval from Seven Group Holdings (ASX: SVW), which holds 25% of the company, to proceed.
We’ll know later this week if Genting has managed to acquire more shares in Echo, with ASX market rules requiring substantial shareholders to file notices at every 1% increase above 6%, up to the takeover threshold of 20%.
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Malaysian casino operator, Genting, has lifted its stake in Echo Entertainment Group (ASX: EGP) back above 5%, but it?s unknown if the company was behind several big trades in Echo over the past few days.
Genting picked up 1.9 million shares in Echo last Thursday, but stockbroker RBS had attempted to buy around 40 million shares, or 5% of Echo?s stock, for a mystery buyer, after the market closed. Both Genting?s Singapore and Hong Kong divisions have been active in Echo share trading, with the Hong Kong division stating last month that it intended to lift its stake in Echo…