James Packer could be stuck without a Crown exit strategy.
Star is already looking at other options in the event that there is a break-up of Crown Resorts which also owns casinos in Perth and Sydney - the latter has yet to open given Crown has been foundunsuitable to hold a licence in NSW at this stage.
Star is most likely to offer to acquire Barangaroo in Sydney - thus cementing its monopoly in NSW - and is believed to be running the numbers on Crown’s Perth casino.
It will not be the only player looking to take a position in a potential break up of Crown. Sources say that high profile Perth businessman and former Crown director,John Poynton,has begun work on forming a syndicate to buy out Crown Perth.
Finkelstein’s reading of an original agreement between Crown and the Victorian government is that Crown Melbourne must be managed out of Victoria for the benefit of Victorians and cannot undertake an expansion outside the state that would detract from Crown Melbourne’s revenue.
On face value,this suggests that Crown’s development of its Sydney casino would be in breach of that agreement. This reading of the agreement between casino and state may also render it difficult for Crown Melbourne to be structurally housed within a larger casino operator.
Legal sources suggest that modifications to the original deal between the Victorian government and Crown were made to allow Crown to buy the Burswood casino in Perth (now Crown Perth).
Even if Star were able to own Crown in Melbourne,it would lose many of the synergy benefits from the merger and would need to re-price its offer.