The newly established Australian gaming company Crown Ltd has agreed acquire 100% of the equity interests in Cannery Casino Resorts (CCR) for US$1.75 billion. This follows speculation that Crown, controlled by James Packer and formerly the gaming division of PBL, was seeking to acquire a gaming operation in Pennsylvania. CCR owns three casinos in Las Vegas and the Meadows Racetrack and Casino in Pittsburgh, Pennsylvania.

Crown previously acquired a 19.6% stake in Fontainebleau Resorts for US$250 million. The Fontainebleau Casino and Resort is on the Las Vegas Strip and Crown also has a joint venture agreement with two private investment companies to develop Crown Las Vegas next door. CCR is replacing its Nevada Palace Casino in Las Vegas with a new hotel and casino complex, East Side Cannery with completion scheduled for September 2008.

The Executive Chairman of Crown, Mr James Packer, said “CCR’s existing shareholders – Bill Paulos, Bill Wortman and Oaktree - have created first class locals properties located in markets 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 presently operates the Cannery Hotel and Casino in North Las Vegas, the Nevada Palace Casino on the Boulder Strip in East Las Vegas, the Rampart Casino in Summerlin in West Las Vegas, and the temporary facility at the Meadows Racetrack in Pennsylvania. The permanent facility should open in April 2009.

Transaction completion and financial close will not occur until Crown has received all of the necessary gaming approvals required to own and operate the casinos within the CCR portfolio. This includes approvals from the Nevada Gaming Commission, Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing Commission. It is estimated that this process will take at least 12 months.

Crown’s CEO, Mr Rowen Craigie said, “The acquisition of CCR is strategically and financially compelling for Crown. 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.”

On completion, the acquisition will be funded from Crown’s existing cash reserves and is expected to be accretive to Crown’s earnings per share. (E-12.12.07)

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