Melco Resorts & Entertainment said it is putting the purchase of a second tranche of shares in Crown Resorts International on hold pending the completion of a regulatory probe into the Australian company.
Melco in March to buy 135.35 million shares in Crown from its majority shareholder James Packer. The stake amounts to 19.99 percent of the Australian operator for a purchase price of US$1.2 billion.
The acquisition of the first tranche was completed on June 30, but the second was due to occur on, or prior to Sept. 30. That will now be delayed for a period of up to 60 business days following the completion of the regulatory review.
“On August 8, 2019, the New South Wales Independent Liquor & Gaming Authority announced it was conducting an inquiry into the transaction and other matters relating to Crown,” it said. “The company and CPH (Crown Holdings Pty) have agreed to allow more time for the relevant Australian regulatory processes to be completed before completing the acquisition of the remaining 67.67 million shares.”
Melco says the price for the second tranche will be reduced by an amount equal to any dividends received by CPH between June and the close of the purchase. It will be increased by A$0.05 per month after Sept. 30 until the close.
The regulatory probes were sparked by an investigative documentary by The Age, The Sydney Morning Herald and 60 Minutes, which accused Crown of multiple wrongdoings in its casino operations, including money laundering and working with authorities to fast-track visas for high rollers.