Crown shares hit a seven-week high after it walked away from an agreement to buy the Cannery casino chain from Millennium Gaming and Oaktree Capital Management for $US1.75 billion ($2.7 billion), The Australian reports.
Instead, Crown said it had agreed to pay $US370 million for an 24.5 per cent stake in Cannery, subject to regulatory approval, and would have an option to buy the rest of Cannery for $US1.4 billion at any time over the next two years.
An institutional trader said investors were pleased because it meant “less exposure to what was always going to be a tough market”.
Shares of Crown raced up as much as 16.5 per cent to $6.06. By late morning, the shares were up 77 cents, or 14.8 per cent, at $5.97, outpacing the broader market.
Crown said it would pay a termination fee of $US50 million after failing to meet its original timetable to satisfy conditions of the deal.
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