Genting sells stake in Echo Entertainment

Genting Singapore said it was selling 39.6 million Echo shares at us$ 4.10 each, a 2.7 percent discount to the closing price of us$ 4.27 on Wednesday. That values the stake at around us$ 165.05 million.

"This comes after a review by the company to rationalize its investments portfolio. The disposal is not expected to have any material effect on earnings per share for the current financial year," Genting said in a statement.

An exit by Genting opens the door for Crown, controlled by Australian billionaire James Packer, to increase its stake in Echo. Crown, which owns a 10 percent share in Echo, has sought regulatory approval to boost that holding to 25 percent.

Shares in Genting extended rose 2.5 percent in Singapore trade. “The market, looking at the share price, welcomes this (move). People didn't understand what the strategy could be in Australia," said Lucius Chong, an analyst at CIMB Research. "This removes a lot of uncertainty because Genting is good at building casinos, looking at emerging growth, whereas Australia is a mature market," Chong said.

Malaysian-based parent Genting Group built its stake through its subsidiaries in Singapore and Hong Kong in June, sparking talk of a potential bidding war. Genting had also sought regulatory approval to increase its holding.

It was not clear whether Genting has withdrawn the application. A spokesman for the regulator was not immediately available to comment on the matter.