Gaming firm and recent offshoot of Publishing and Broadcasting, Crown (CWN) announced today that it has agreed to acquire casino operator Cannery Casino Resorts (CCR) for $2 billion plus acquisition costs of about $57 million.
CCR currently operates four casinos in Nevada and Western Pennsylvania in the US.
Despite having recently de-merged from PBL, James Packer has maintained his influence in Crown with his Consolidated Press Holdings owning almost 33% and Mr Packer as executive chairman of Crown.
Mr Packer said CCR's existing shareholders have created first class local properties with attractive long-term growth prospects.
"Crown's skills and experience in operating successful locals casinos will enable us to grow the CCR business further.".
CCR is also developing two casino/hotel complexes which are expected to be almost finished prior to financial close of the acquisition.
The East Side Cannery casino in East Las Vegas, Nevada is expected to be completed by September 2008 and the Meadows Racetrack & Casino permanent facility has an expected completion date of April 2009.
Once these two construction projects are finished, CCR will operate a total of about 8,400 slot machines, 75 tables and more than 720 hotel rooms.
Crown CEO Rowen Craigie said the acquisition is strategically and financially compelling.
"CCR provides Crown with an entry point into the US locals casino industry via a well-managed and successful company."
"CCR presents Crown with high-quality new or near-new facilities without exposure to construction risk and without high capital expenditure requirements."
Crown said the acquisition would be funded from existing cash reserves and was expected to add to Crown's earnings per share.
The acquisition of Crown will not be completed until Crown receives necessary gaming approvals, including approvals from the Nevada Gaming Commission, Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing Commission.
It was estimated that this would take at least 12 months.
The purchase price paid by Crown will be reduced to the extent that there is any construction capital expenditure remaining to be spent at completion.
The purchase price is also subject to an adjustment dependent on the actual timing of the receipt of the necessary gaming approvals.
Crown shares were three cents higher to close at $13.83.
