Crown makes solid ASX debut

PBL’s gaming assets were hived off into Crown Ltd, and the media assets were demerged into Consolidated Media Holdings Ltd (CMH) last month. PBL shareholders received one share in each of the new companies and $3 cash for each PBL share they owned.

At the close of trading, the total value of one Crown share, one CMH share and the $3 cash payment was $21.29. PBL shares last traded at $20.80 on Friday.

CommSec senior analyst Craig Shepherd said there was "a little bit of a premium" to the last price for PBL shares. "There’s some short-term interest in both stocks," he said. "Both of them represent such clear choices and offer very distinctive opportunities and Crown obviously has some sort of purchase."

Former PBL executive chairman, Packer, is chairman of Crown and deputy chairman of CMH. Shepherd said CMH represented the first effective listing of payTV assets in Australia, which were assets that were attractive to investors. He said CMH was therefore likely to attract a premium at some point as a potential target for merger or acquisition.

Brokers Intersuisse said in a note to investors that while Crown’s strategy to expand internationally had higher risk, it also aimed for significantly higher growth than PBL had offered. "We see upside in playing alongside the accumulated Packer expertise in gaming, as the demerger benefits become fully factored in," Intersuisse said. "PBL Media also offers leveraged upside in new media."

Crown shares began trading at $14.88 each and finished at $14.27 on a volume of about 1.14 million, giving it a market value of $9.72 billion. The stock traded between $14.00 and $15.00.

CMH began trading on a deferred settlement basis at $3.70 and closed at $4.02 on a volume of about 6.77 million, giving it a value of $2.74 billion. They had traded between $3.65 and $4.10.

PBL shareholders last month voted in favour of demerging the company’s media and gaming assets. Packer said then that shareholders would gain greater benefit from a "pure play" gaming business and a new media business, and that the split should result in higher share prices.

Crown’s businesses include the Crown casino in Melbourne and Burswood casino in Perth, a 41.4 per cent stake in Melco PBL Entertainment (Macau) Ltd, a 50 per cent interest in the Aspinalls business in the United Kingdom, a 19.6 per cent stake in Fontainebleau Equity Holdings LLC in the United States, a 50 per cent stake in Gateway Casinos in Canada, and investments in other international gaming businesses.