Casino mogul James Packer has sold half his shares in Crown Resorts for A$1.76bn ($1.2bn), continuing the phased withdrawal from public life of a family that has been at the forefront of Australian business for many decades.

The sale of a 20 per cent stake in the gaming group to the Macau-based company Melco Resorts and Entertainment follows the collapse of takeover talks between Crown and the US gaming group Wynn Resorts in April. Crown Resorts shares fell as much as 3.4 per cent following the announcement.

Mr Packer will continue to own about 26 per cent of Crown through his private investment vehicle Consolidated Press Holdings and said he remained “vitally interested” in Crown’s success as a world gaming business. 

“The sale allows me to continue my long term involvement with Crown and at the same time to better diversify my investment portfolio,” he said. 

Mr Packer has spoken publicly about his battle with mental health issues and last year resigned from the boards of more than 20 companies to prioritise his wellbeing.

Melco said it would pursue representation on Crown’s board of directors following the approval of Australian regulatory authorities of the transaction. Melco is controlled by Lawrence Ho, a former business partner of Mr Packer, who said in a statement he viewed the investment in Crown as “a strategic stake”, adding that he could seek to increase its interest in Crown in the future.

Citi said Melco’s strategic investment in Crown would further extend the group’s global footprint, which would help its chances of procuring a gaming licence in Japan. 

“We would not be surprised to see Melco increasing its interests [in Crown] in the future if it can get seats/control of the board,” said Citi.

Melco will buy 135.35m Crown Resorts shares for A$13 a share, a lower price than the A$14.75 a share takeover bid made by Wynn Resorts last month.

Mr Packer’s share sale occurs at a tricky time for Crown, which is battling weak sales among high roller VIP gamblers — a segment of the market that is critical to profitability, as well as the group’s A$2bn investment in a new casino in Sydney. 

“In our opinion, the economics of Crown Sydney, Barangaroo, scheduled for completion in 2021, is predicated upon robust VIP patronage,” said S&P Global Ratings. It said the recovery of Crown's VIP business stalled “somewhat” during the second half of last year, “reflecting our view that liquidity remains tight for Chinese VIP players”.

Mr Packer ended his long partnership with Mr Ho in 2016, selling Crown’s remaining stake in Melco International Development back to Melco for A$1.6bn, following the arrests of Crown staff in China. The two men said the split was amicable.

Mr Packer inherited a media and publishing empire from his father Kerry Packer, which he later sold and used the proceeds to build Crown Resorts into Australia’s largest casino operator. 

The business initially flourished and expanded to the US, Macau and elsewhere. But when 19 Crown employees were arrested in China in 2016 and later convicted of “gambling-related crimes”, Mr Packer retrenched the group back to Australia and sold off most of its overseas assets.

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