Packer shares down $500m in a month as Crown slumps

While the billionaire contemplates the future of his stake in Crown, James Packer has a string of other more successful investments.

James Packer’s wealth is falling. Aaron Francis/The Australian

After a promising start to the year, James Packer has had about $500m wiped off the value of his Crown Resorts shares in the past month.

The hits keep coming for Crown, with its share price marked down again in the past couple of days of trading after rival Star Entertainment announced on Friday that it was withdrawing its $12bn merger proposal.

It also has to deal with the fallout from the ongoing Victorian royal commission into the group, coming after Crown is already investing in a reform agenda in a bid to regain suitability for its NSW casino licence after the Bergin Inquiry temporarily revoked it earlier this year.

There is also a royal commission underway in Western Australia, where Crown has its Perth casino.

All of which is putting a dampener on the Crown share price, which in turn has the Packer fortune – detailed in The List – Australia’s Richest 250 – taking hit after hit.

The Crown share price is now back to trading at the same level as at the start of 2021, and Packer also has had to do without dividend payments from Crown that were scrapped as the casino and resorts giant struggled with Covid-related lockdown requirements.

The dividends had previously been worth $150m or more annually to Packer, giving him a big income stream.

Sydney's Crown Casino at Barangaroo Picture: NCA NewsWire/Flavio Brancaleone

It is not all bad news for Packer though, with Crown shares up almost 9 per cent in the past 12 months, meaning his wealth would be up about $200m in the same time. Longer term

though, Crown shares are worth about 25 per cent less than they were five years ago.

Packer’s wealth was estimated at $4bn on The List – Australia’s Richest 250 when the latest edition was published by The Australian in late March.

While it is a whopping number in most people’s eyes, it was only good enough for 18th position on the list – a far cry from when his late father Kerry Packer was long considered the wealthiest person in Australia, a position James would later inherit.

The bulk of Packer’s wealth is still held in his roughly 37 per cent stake in Crown, and there has been an offer from US private equity firm Oaktree worth $3.1bn to buy “some or all” of Packer’s stake in the group in a debt-equity hybrid deal.

That deal would give him the option of exiting Crown, which he has already agreed to have no influence over as the major shareholding after the fallout of the NSW inquiry into its Sydney licence.

Yet the news isn’t all bad for the Packer fortune. While a previous Crown share slump was a major factor in his private Consolidated Press Holdings making a $402m loss in 2020, CPH has a string of other investments that have performed strongly.

CPH is said to have about $100m directly invested in Australian venture capital firm Square Peg and co-invested with the venture capital firm in a range of companies, including Israeli freelance marketplace Fiverr.

Square Peg and backers such as Packer put $60m into Fiverr back in 2015. Fiverr has surged about 180 per cent in the past 12 months on the New York Stock Exchange and more than 660 per cent since its 2019 listing

Packer also still has plenty of assets, including mansions in Los Angeles, properties in Mexico and Argentina, and a superyacht.

CPH also retains an interest with Hollywood actor Robert De Niro in a $US250m luxury resort project called Paradise Found Nobu on the Caribbean Island of Barbuda, which is still to be developed.

Originally published as Packer shares down $500m in a month as Crown slumps