Shares of Crown Resorts Ltd (ASX: CWN) have emerged from their trading halt today after it announced it had sold even more of its Melco Crown venture since yesterday.
The gaming and entertainment business' shares didn't trade at all yesterday after the company provided an update regarding "major initiatives to enhance shareholder value".
Specifically, it said it had entered into a bilateral agreement with Melco International Development to sell 198 million of its Melco Crown Entertainment (MCE) shares, equivalent to 13.4% of total MCE shares outstanding. Following the sale, it would hold a 14% stake in the business, down from 27.4% previously.
Since yesterday, Crown Resorts has entered into further agreements which will reduce its shareholding of MCE by another 2.8% to 11.2%. The latest stake valued the shares at US$5.33 each, compared to the US$6.00 per share recognised for its 13.4% stake.
In total, Crown Resorts expects the sales to generate proceeds of around $1.9 billion which will, in part, be used to reduce its net debt by around $800 million. It will also fund a special distribution to shareholders of approximately $600 million and enable a share buyback of around $500 million. Representing an increase of $100 million and $200 million, respectively, compared to the amounts reported yesterday.
As my colleague noted yesterday, Crown's sale of Melco Crown represents a huge change in its operating structure, and will hopefully enable management to focus on getting the most out of its core assets.
Crown Resorts' share price has risen 3.1% today upon emerging from the trading halt. Shares of Star Entertainment Group Ltd (ASX: SGR), by comparison, have fallen 1.1%.
