Big bucks for new Cannery deal

Mar 17, 2009 4:07 PM
by Ray Poirier | For a $50 million termination fee, Australian gaming mogul James Packer has been able to walk away from the $1.8 billion purchase of Cannery Casino Resorts LLC, a partnership involving Bill Paulos and Bill Wortman and the investment group, Oaktree Capital.

But, for another $320 million, Packer’ Crown Ltd. gets a new deal that allows him two years to take full control of the Cannery Casino Resorts (CCR) at the original price; take a 25% stake in the company or settle for a minority stake.

If for some reason, such as failure to win approval from Pennsylvania regulators, Packer can’t complete the deal within the two years, he must pay Cannery Casino Resorts a breakup fee of $290 million.

Related Articles:
Nevada revenues hit new low
Casino revenues still in freefall
Nevada revenues continue to slide
Also Check out our Race & Sports Section

Still undetermined is the role James Packer’s sister, Gretel, will play in the Pennsylvania proceedings. Late last year, she, as a beneficiary of a trust established by the late gambling whale, Kerry Packer, attempted to withdraw her participation in the Pennsylvania regulatory deliberations.

Some believed that Gretel’s objections to provide full financial disclosure in Pennsylvania was simply a ploy to get Crown Ltd. out of the Cannery deal. Crown officials, however, insisted they were committed to the purchase.

Millennium Gaming Inc., the Paulos/Wortman partnership, owns 58% of CCR while Oaktree Capital holds 42%.