Cashed-up PBL ready to punt in US

JAMES PACKER'S Publishing and Broadcasting Ltd is set to spend the remaining cash from the demerger of its media and gaming assets on as many as three casinos, including at least one in the United States.

The company said yesterday it was running the ruler over at least one unnamed US gambling outfit.

"If this opportunity, and two other opportunities which PBL was also considering, were to proceed, then most of Crown's cash reserves would be deployed," the company said in a statement. The announcement confirms remarks it made last month in documents related to its demerger.

Talks with one business have advanced to the stage that PBL is negotiating purchase terms and it expects a result within three weeks. This purchase would take up the lion's share of the $2.7 billion in cash; the other two were much smaller, PBL said.

The news comes two days before shareholders meet to vote on the scheme of arrangement that will split the company's media and gaming interests.

Sources close to the company said more than 98 per cent of proxies had been in favour of the deal, meaning Friday's vote would be a mere formality.

Neither Mr Packer nor Crown's chief executive, Rowen Craigie, would be commenting on the impending deal until next month, a PBL spokesman, Gary O'Neil, said.

While the identity of the purchases is not known, they are believed to include two racetrack-cum-casinos on the US east coast.

The Meadows is in the far south-west of Pennsylvania, while the Chester is in the far east, near Philadelphia.

The fact that they are worth a combined $US825 million ($938 million), much less than the $2.7 billion PBL has to spend, indicates there are other acquisitions under consideration.

Any purchase of this magnitude would be PBL's largest acquisition in the US and its first move within the US outside of the gambling mecca of Las Vegas in Nevada.

Both casinos are beneficiaries of the opening up of gambling industry in Pennsylvania two years ago and were some of the first casinos to open there.

The Meadows has 1738 poker machines and the permanent casino is expected to open in 2009, with as many as 5000 machines.

The Chester, which is owned by gambling giant Harrah's, opened in January and has 1000 more poker machines than the Meadows.

Analysts yesterday said if the Meadows was one of the purchases they would be concerned because PBL did not need to buy any more partially built assets.

With the Las Vegas properties also yet to be built, and two years' more construction likely at two properties in Macau, the purchase of another temporary casino could be another headache the company did not need, they said.

PBL would also have to face a licensing process, as long as 18 months, but it will be owned outright and will make a profit from day one, PBL said.

Shares in the company closed down 13c at $19.43.
Sydney Morning Herald

News Added: 21 November, 2007

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