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Matthew Smith has been a business and financial journalist for more than a decade. He previously worked with the Financial Times Group, reporting from New York on company buyouts and refinancing in the wake of the Global Financial Crisis. He started his career reporting on the funds management industry in Sydney.

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Casino shareholders show their hands on Echo’s future

Published 29 July 2013 11:18, Updated 01 August 2013 00:45

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Casino shareholders show their hands on Echo’s future

Paul Xiradis, chief executive of former Echo shareholder Ausbil Dexia, says Crown’s new casino in Sydney will threaten the customer base of The Star. Photo: Simon Alekna

Movement on the share register of Echo Entertainment, owner of The Star in Sydney, reveals differing opinions on who’s the likely winner of Australia’s casino wars.

Since James Packer’s Crown was given approval for a Sydney casino licence – putting it in a position to compete against The Star – Echo’s share price has tumbled, trading at all-time lows.

Its shares were trading at $2.60 on Monday morning, less than half of the value at their peak midway through 2012.

While a handful of shareholders have used the opportunity to maintain and increase their interests in Echo, Ausbil Dexia, has confirmed to The Australian Financial Review it has walked away from its Echo investment.

Ausbil chief executive Paul Xiradis told the Financial Review Crown’s planned “high rollers” Sydney casino could threaten Echo’s customer base. He confirmed Ausbil will sell its remaining share in the casino operator after ceasing to be a substantial shareholder in June last year.

Crown can start competing against The Star from November 2019.

Brisbane battle

Xiradis says he is disappointed in the The Star’s ability to grow its mass market customer base and he expects Crown’s planned development would likely compete in the same market despite it’s billing as a venue for high rollers.

Crown’s new casino development in Brisbane could be another risk to Echo, Xiradis also told the Financial Review.

While Ausbil has taken its chips off the table for Echo, other investors have decided to anti-up.

In the last month and a half, Echo’s possible strategic owner Genting Hong Kong – controlled by Malaysian casino mogul KT Lim – has increased its holding in Echo to 6.6 per cent; Perpetual Investments has raised its exposure to 12.68 per cent; and Goldman became a substantial shareholder with a 5.15 per cent stake, according to ASX disclosures.

National Australia Bank’s MLC has slightly reduced its exposure but maintains a substantial 7.65 per cent holding.