BUSINESS

Genting seeks to buy 25% of shares from Echo

TAGs: Echo Entertainment Group, genting group, genting hong kong, Genting Singapore

James Packer, Lim Kok Thay, Genting, Echo EntertainmentGenting Hong Kong Ltd. has approached Australian shareholders in Echo Entertainment Group Ltd. seeking to buy shares.

Genting Hong Kong Ltd., a cruise ship operator that partly owns a Manila casino and is also a subsidiary of Malaysian gambling giant Genting Group Bhd., is seeking approval from the New South Wales government’s Independent and Liquor Gaming authority to raise its current stake from 4.24 percent in Echo to 25 percent. This could be a potential battle with Australian billionaire James Packer who owns a 10 percent stake.

Newspapers on Friday reported that a buyer, believed to be Genting Hong Kong, was seeking 40 million Echo shares.

“There is a definite interest to buy Echo shares, but at the wrong price,” a fund manager told Reuters, speaking on the condition of anonymity because the matter is confidential.

Echo, which is Sydney’s only casino operator, limits the maximum stake an individual shareholder may hold to 10 percent, and this cap can only be lifted upon approval from New South Wales and Queensland state regulators.

James Packer’s Crown Ltd., has also applied to the NSW Independent Liquor and Gaming Authority to breach the 10 percent shareholder cap and acquire up to 25 percent of Echo.

Genting Bhd., controlled by its chairman, Lim Kok Thay, revealed its interest in Echo earlier this year, when its subsidiaries, Genting Hong Kong and Genting Singapore, started buying stakes in the Australian firm.

But in a surprise move, Genting Singapore PLC last month sold off its 4.8% stake in Echo saying it wanted to “rationalize its investments portfolio”. Genting Hong Kong, however, said that it planned to keep its investment in Echo.

Genting Bhd. hadn’t disclosed its intentions in acquiring its Echo stake, but analysts said buying Echo would help the group build a regional footprint and would plant the Genting flag in a country that is already a hot destination for Asian tourists, who make up the casino company’s core customers.

A spokeswoman for Genting in Australia declined to comment. Officials with Genting Hong Kong also declined to comment.

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