Australian PBL to split into gaming and media companies

PBL said shareholders would receive us$ 1.6 billion in cash as well as shares in both companies under the restructuring. The casino and international gaming assets will be placed in a company called Crown, while its television network, magazines and other media businesses will be held by Consolidated Media Holdings.

"PBL believes the split will better facilitate recognition of the value of the underlying assets in the group and will create two pure-play companies with attractive investment characteristics," PBL said in a statement.

Executive chairman Packer said PBL had successfully recapitalised its investment in PBL Media over the last 12 months and seen strong earnings growth in its new media businesses, including the pay television interests.

After also consolidating its leading position in the Australian gaming market with the acquisition of Burswood casino in Perth in late 2004, the company had turned to leveraging its gaming expertise offshore. This includes significant investments in Macau, and more recently, in the United Kingdom and South America.

"It is now time to let these two successful businesses prosper in their own right," Packer said. "Investors will have the opportunity to invest in a strong and growing pure-play media company and also in a world class gaming company."

PBL CEO John Alexander said the two businesses had different operating characteristics and capital requirements, and separating them was the best way to create shareholder value through growth opportunities. The new businesses will be operated separately, each with its own board.

Packer and Alexander take complementary roles in the new companies, with Packer as executive chairman of Crown and deputy chairman of CMH, and Alexander as executive chair of CMH and deputy chair of Crown.

Rowen Craigie will become the CEO and managing director of Crown, which will be based in Melbourne.