Packer sells media to finance gaming

FURTHER evidence has emerged that James Packer will continue to sell media assets to finance his push into the gaming sector.

FURTHER evidence has emerged that James Packer will continue to sell media assets to finance his push into the gaming sector, after reports from the US yesterday of the $US324 million ($348 million) sale of a 25 per cent stake in Hollywood film studio New Regency Productions.

Mr Packer sold his 25.4 per cent interest to fellow billionaire Arnon Milchan, according to American showbusiness magazine Variety.

The magazine reported Mr Milchan as pointing to Mr Packer's single-minded focus on gaming assets: "James Packer is a great friend and business partner. We have other investments together, and we will continue to search for opportunities that would be mutually beneficial to both of our interests, but James is focusing his efforts on the casino business and I am focusing on Regency."

The New Regency move is the second indication in recent weeks that Mr Packer may be looking afresh to sell media assets to finance his gaming push, after his moves in 2006 and 2007 to sell 75 per cent of PBL Media, which controls the one-time flagship Packer family media assets, including the Nine Network and ACP Magazines.

In negotiations for the ultimately failed bid to privatise Consolidated Media Holdings -- in which Mr Packer has a 38.4 per cent stake -- Mr Packer three weeks ago told representatives of his partner in the deal, Illyria boss Lachlan Murdoch, that he would only continue to support the privatisation if he was allowed to sell down his stake to 25 per cent.

This would have resulted in Mr Packer's private company, Consolidated Press Holdings, pocketing a cash windfall of about $600 million on the deal.

Mr Packer's father, the late Kerry Packer, invested in Mr Milchan's successful film and television company in 1994. It is believed he paid about $US100 million for a 30 per cent stake.

But in May last year -- in the documents announcing the split of the Packer family's PBL empire into Crown Ltd and CMH -- it was clear the New Regency investment was not a core long-term holding. PBL said at the time it would "look to sensibly monetise" its ownership interests in Hoyts, sold last year to another private equity firm, and New Regency, recently held in Crown.

Mr Packer's Macau gaming interests had a rocky start after opening in May last year, but there has been a reported turnaround after a concerted focus on VIP gamblers.

Twentieth Century Fox -- a subsidiary of Rupert Murdoch's News Corporation, publisher of The Australian newspaper -- in 1997 bought 20 per cent of the studio for a reported $US200 million, and continues to maintain the stake.

Mr Milchan was reported by Variety as saying the buyback from Mr Packer allows Regency to focus on its partnership with Fox, where the studio is based. "With Fox as a distribution and production partner, I couldn't be in a better position," he said. "I see a tremendous growth opportunity going forward for this company."

Mr Milchan will now own 80 per cent of the company that has produced hits such as LA Confidential, Mr and Mrs Smith and Natural Born Killers, as well as television successes like Malcolm in the Middle.

Mr Packer benefited greatly from Mr Milchan's success with German sporting goods company Puma. Regency paid $US60 million for 12.5 per cent stake of the company in 1996, grew its interest to 42 per cent and then reaped $US676 million when it sold in 2003.

Sources close to Mr Packer's gaming company, Crown, last night said only that the company had been "working on something" involving New Regency, but would not confirm that any sale had yet gone through.

"Once we get to a point that we've sold it, we'll announce something," one source said.