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Australia’s Crown Resort Rumored to Bid $2 Billion for Cosmopolitan Las Vegas

Apr 22, 2014 3:00 am

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The Cosmopolitan has yet to turn a profit, but Crown would be taking over at time when both visitor numbers and spend are on the rise on the strip. The high-profile purchase would finally give Crown a presence in the Vegas market.

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The Cosmopolitan of Las Vegas  / Flickr

The ceremonial ribbon cutting for the opening of the Cosmopolitan Of Las Vegas. The Cosmopolitan of Las Vegas / Flickr

Australia’s Crown Resorts Ltd is set to bid for a $2 billion casino complex in Las Vegas, according to media report, underscoring the Melbourne-based casino operator’s ambition to expand to more markets.

Crown will lodge an expression of interest for three-year-old casino and hotel complex The Cosmopolitan of Las Vegas, which is owned by Deutsche Bank, the Australian Financial Review said on Tuesday, citing unnamed industry sources. The sale was expected to fetch $1.5 billion to $2 billion, AFR added.

Crown, controlled by billionaire James Packer, is also bidding for a $1 billion-plus casino project in Brisbane after winning the right to operate a VIP gaming facility at its luxury hotel project in Sydney. The company is building new casinos in Sri Lanka and the Philippines, and it has expressed an interest in building a $5 billion-plus casino and resort in Japan.

Crown was not immediately available for comment.

The deal would be another attempt by Crown to break into the U.S. market, after it got burned by its two previous investments there made just before the global financial crisis.

Crown bought Cannery Casino Resorts for $1.75 billion in 2007 and invested $250 million for a 19.6 per cent stake in the Fontaine­bleau Resort.

The Cosmopolitan opened in December 2010, but has made net losses of $298.3 million over its first three years of operation, the paper said.

Deutsche Bank, which took ownership of the resort when it foreclosed on the project’s previous owner, has been preparing to sell it since late 2012.

Reporting by Maggie Lu Yueyang. Editing by Cynthia Osterman.

Copyright (2014) Thomson Reuters. Click for restrictions.

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