Lawrence Ho agreed to buy a 20 per cent stake in Crown from James Packer in May last year.
Melco last year agreed to buy a 20 per cent stake in Crown from Mr Packer for $1.76 billion but only half of that changed hands,with the second tranche of shares put on hold after a NSW inquiry began probing whether Melco's involvement violated the conditions of Crown's Sydney casino licence. The inquiry is also exploring revelations thatCrown went into business with Asian crime-linked tour companies as part of an aggressive push to attract ultra-rich Chinese high-rollers to its Australian venues.
Melco's decision to sell out at $8.15 a share compared to the $13 purchase price in June last year meant Melco took a $328 million loss.
Melco's sale comes amid a deep cost-cutting drive as the coronavirus crisis inflicts enormous pain across the casino sector in Melco's main Asian markets,gaming analysts said on Wednesday. Forcing the temporary closures of gaming rooms across Macau and confining top-end gamblers to their home countries,the pandemic has so far caused an estimated plunge in gambling revenue of more than 80 per cent in the region.
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Macquarie analysts noted reports that Mr Ho had circulated a memo citing"devastating"business conditions due to coronavirus that could stretch into 2021. Mr Ho would not draw a salary for the year,the memo said,and there had been a clear-out of nine executives from the company's senior ranks including across gaming operations,retail and marketing.
News of Melco's withdrawal from Crown Resorts on Wednesday has renewed speculation about a future takeover play for the company potentially by Blackstone – which some market insiders suggested could seek to split off Crown's property portfolio – or by an international casino giant,given there was no longer the risk of Melco"being a blocker"to any takeover transaction.
Crown's shares closed up almost 11 per cent at $9.54.