James Packer’s ambitions intact after a $10b ‘corporate caning’

James Packer may have suffered the corporate equivalent of a headmasters’ caning when a US gaming giant pulled a $10 billion takeover offer after details of the sensitive deal leaked to the media. But having the deal out there did three things that now work in Packer’s favour.

• James Packer sells his half stake in Crown to Melco

James Packer may have suffered the corporate equivalent of a headmasters’ caning when an American gaming giant pulled a $10 billion takeover offer after details of the sensitive deal leaked to the media.

But having the deal out there did three things that work in Packer’s favour.

First it advertised to the world he was a willing seller of his majority stake in the gaming empire he built from the ground up.

James Packer’s health looks on the improve as he takes a stroll in LA showing off his distinct weight loss just yesterday. Picture: Diimex.

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Second it pumped up the Crown share price - something Packer had long believed was well under value.

And third, it flushed out a buyer in his old frenemy Lawrence Ho, son of China’s biggest gaming tycoon Stanley Ho, nicknamed King of Gambling.

Packer would have made hundreds of millions of dollars more under the takeover proposal from Las Vegas gaming giant Wynn before they abruptly took the offer off the table, citing the premature release of details of the talks.

James Packer and (right) the model of Crown Resorts’ One Barangaroo casino, hotel and apartments.

Packer pictured in 2006 with Melco International chairman Lawrence Ho Yau-lung and Wynn Resorts chairman and chief executive Steve Wynn. Photo: SCMP

But at $13 a share, the deal Packer has struck today with Ho for the purchase of a 19.99 per cent stake in Crown is still well above the price Crown shares were before the Wynn deal leaked, then $11.75 per share.

Sure, Wynn’s offer was $14.75 per share and Packer is selling today for less than that, but he still has a $1.8 billion payday - allowing him to realise a long-held ambition of venturing into new investment territory.

It also gives him the cash to further cut ties with Australia and do deals overseas, another long-held ambition.

All indications are this is not the end of the deal between Packer and Ho, who has confirmed he would like to get his hands on more of the 26 per cent of the stock in Crown Packer still holds.

It remains to be seen the price their pair will strike but anything that creeps Ho’s stake closer to a majority share - and therefore control - is sure to come at a healthy premium.