Packer could have $9b war chest

James Packer

James Packer's deal to sell half of Publishing & Broadcasting's media assets could give him as much as A$8 billion ($9 billion) to expand into Asian casinos, say investment advisers Merrill Lynch.

Publishing & Broadcasting agreed on Wednesday to shift assets into a new unlisted company owned equally with buyout firm CVC Asia Pacific, raising A$4.5 billion for its casino expansion.

The deal gives Packer "significant fire power to make strategic, higher-growth gaming acquisitions around the region," said Patrick Russel, an analyst at Merrill Lynch.

Using borrowings, the company may have between A$4.5 billion and A$8 billion for acquisitions, he said.

Packer, Australia's richest man, has accelerated Publishing & Broadcasting's push into gaming since the death of his father Kerry last year, developing three casinos in Macau and joining a A$3.5 billion bid for Singapore's second casino-resort. His next target might be Japan, where casinos may be legalised in 2008, and smaller markets such as Vietnam and the Philippines, Russel said.

"We understand PBL has already had an initial look at the opportunities available in Japan," Russel said.

Asia's biggest economy may offer licences to build casinos in Tokyo, Okinawa and a third city, he said.

Other options include Russia and Las Vegas, said Cameron McKnight, an analyst at JPMorgan Chase in Sydney.

Publishing & Broadcasting could team with Wynn Resorts to develop a site next to the Wynn Las Vegas casino, he said.

- BLOOMBERG