What: At 7:05 pm last night, the James Packer-backed Crown Resorts Ltd (ASX: CWN) released an announcement to the ASX stating that Crown had reduced its shareholding in Melco Crown Entertainment (MCE).

So What: Melco Crown is a Nasdaq-listed corporation which owns The City of Dreams and Studio City casinos on the Chinese island of Macau.

According to the release, Crown has entered into an agreement with MCE to repurchase 155 million shares held by Crown. The repurchase will be undertaken at US$5.1667 per share and will generate proceeds of approximately US$800 million for Crown.

As a result of this agreement, Crown’s shareholding in MEC will decline from 34.3% to 27.4%.

The announcement also noted that: “Crown intends to maintain a significant investment in MCE.”

The cash proceeds will initially be utilised to reduce Crown’s net debt position, however, the board will also assess the group’s capacity to make a distribution to shareholders.

Now What: It’s quite a remarkable situation which Crown’s shareholders find themselves in…

Just a few years ago, Crown was a market darling as investors backed the story of Macau’s growth prospects – Crown’s share price flirted with $18.

At the same time, Star Entertainment Group Ltd (ASX: SGR) which is the operator of casinos in Sydney and Brisbane was out-of-favour with investors viewing it as “ex-growth” – Star’s share price sank towards $2.

Investor sentiment has certainly reversed however! The share price performance of Star over the past two years is up 114% and the stock currently trades near $6; meanwhile, the share price performance of Crown has been minus 28% and the shares are trading below $12.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.