MALAYSIAN casino operator Genting has lifted its stake in Echo Entertainment back above 5 per cent but the market will not know until later this week if the would-be suitor was behind big trades in Echo shares over the past two trading days.
Genting's Hong Kong arm, which has applied to the regulators to lift its stake in Echo to as much as 25 per cent, acquired a 4.2 per cent share of Echo in June, then started acquiring shares again two weeks ago, according to the substantial shareholder notice lodged with the ASX yesterday.
Genting's last recorded acquisition of shares was last Thursday. After the market closed that day stockbroker RBS tried to acquire about 40 million shares - 5 per cent of Echo's issued stock - for a mystery buyer at $3.90 each.
According to the ASX notice, Genting picked up 1.9 million shares that day at an average price of $3.85.
Echo's share price has hovered around the $4 mark since Friday with big parcels being traded.
Genting Singapore sold 39.6 million Echo shares last month at $3.99, but Genting Hong Kong stated at the time that it still intended to lift its stake above 10 per cent if permitted by the NSW Independent Liquor and Gaming Authority.
Last week the regulator revealed that Genting had applied to buy up to 25 per cent of Echo.
James Packer's Crown Limited is also seeking to lift its 10 per cent stake to 25 per cent if granted permission by the casino regulator.
Genting would have to file a new substantial shareholder notice if its stake exceeds 6 per cent, and at every 1 per cent increase up to the takeover threshold of 20 per cent.
Speculation has centred on whether Genting is potentially a rival bidder to Packer's Crown or is looking to have a blocking stake as leverage to extract a deal from Australia's major casino operator, which also has significant investments in China's casino enclave, Macau.
Crown is expected to build a large enough stake in Echo to extract a deal to share Sydney's VIP gambling market. This will involve splitting Echo's casino licence for The Star to cover a $1 billion resort at Sydney Harbour development Barangaroo.
Echo's defence against these potential suitors has been undermined by an exodus of directors and senior managers. Infighting has led to the recent departure of non-executive director, Brett Paton, and the announced resignation of chief executive Larry Mullin.