Leighton Holdings' Casino Deal Clears Hurdles Despite Negative Inquiry Findings

Strategic Insights -

A New South Wales inquiry has concluded that Leighton Holdings' chief executive, Mr Wal King, and another executive are not of good repute due to character, honesty, and integrity concerns. However, this setback did not impact the company's investment in the Sydney casino, with Leighton and its partner Showboat Inc still set to operate the facility. The market reacted positively to the decision, with Leighton's shares increasing by 20 cents to $1.90.

Key Takeaways:

  • Leighton Holdings' 4.8% investment in the casino and its 15% share in the casino's management company were unaffected by the inquiry's findings.
  • Leighton and Showboat Inc were awarded the license for Sydney's first casino, with Leighton to build the facility and Showboat to operate it.
  • Mr Kerry Packer's group launched a two-pronged legal assault on the Government and the authority to challenge the decision.
  • The $345 million placement of 67% of Sydney Harbour Casino to institutions was successfully completed, with the lead underwriter, Bain & Co, reporting that the planned float of the casino was expected to take place by mid-1995.
  • Mr King disputed the inquiry's findings, stating that the group's reputation would not suffer and that he and Mr Vella were "generally speaking honest, industrious and honorable men doing their best in a highly competitive industry."
  • Leighton will start building the casino immediately, with an expected opening date of April 1998.

Statistics:

  • 4.8%: Leighton Holdings' investment in the Sydney casino.
  • 15%: Leighton's share in the casino's management company.
  • 20 cents: The increase in Leighton's share price following the decision.
  • $1.90: The new share price of Leighton Holdings.
  • $345 million: The amount invested in the Sydney casino by institutions.
  • 67%: The percentage of Sydney Harbour Casino ownership placed with institutions.
  • 13: The number of international fund managers involved in the placement.
  • 11: The number of local institutions involved in the placement.
  • Mid-1995: The expected date of the planned float of the casino.
  • April 1998: The expected opening date of the Sydney casino.

Sources:

  • Sydney Morning Herald - Agence France-Presse.