ECHO DISAPPOINTED AT REJECTION
Written on the 5 July 2013
ECHO Entertainment (ASX:EGP) has responded with disappointment to the NSW government’s decision to reject its billion-dollar redevelopment proposal for Sydney’s The Star casino.
Premier Barry O’Farrell yesterday gave the green light to a rival proposal from Crown Limited (ASX: CWN) for its $1bn high-rise hotel and casino at Barangaroo South on the Darling Harbour.
EGP had produced its proposal in response to CWN’s unsolicited bid to the NSW government, but James Packer’s company was holding the trump card and secured approval to move to stage three of the process.
The Brisbane-based company dropped 4.12 per cent to $2.79 per unit as trade opened this morning and it came out of a trading halt called in anticipation of yesterday’s announcement.
CWN opened strongly, up 5 per cent to $12.21, also resuming from a trading halt.
Echo chairman John O’Neill says its proposal was complementary to the government’s vision for a revitalised Pyrmont and Darling Harbour precinct and is disappointed it was overlooked.
The company’s 80-year Sydney casino license includes another six years of exclusivity and it plans to make the most of those years.
“The Star is Echo’s flagship property and we are here for at least another 80 years,” says O’Neill.
“Echo remains conservatively geared and, in the absence of its unsolicited proposal proceeding, has the funding and operational flexibility to pursue a range of growth avenues for the business.
“Echo looks forward to working constructively with the NSW government and exploring other initiatives to deliver an enhanced integrated resort at The Star which will drive significant tourism and other economic benefits for NSW and generate value for Echo’s shareholders.”