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James Packer's bromance with investment banker is over - but who jilted who?

It was a bromance of epic proportions. Billionaire heir to a media and gaming empire, James Packer and the high profile and successful investment banker from UBS Matthew Grounds.

The relationship that endured both Packer’s corporate triumphs and blow-ups has now itself imploded. But who jilted who?

While the break-up only became apparent this week when Packer’s Crown Resorts replaced UBS as its adviser on a share buyback transaction, some say the fraying in the relationship started a few years back during negotiations between James and his sister Gretel over the spoils of the family inheritance. Packer was being advised by Grounds on the deal.

Gretel emerged from re-negotiations with her brother with what is reported to be a fortune of around $1.25 billion - an amount some say James was not happy with and for which he laid some blame at the feet of Grounds.

Other reports have implied that Crown selling out of its Macau joint venture too early and leaving money on the table left Packer unimpressed with the advice from Grounds. (Although surely that decision was made by Packer.)

Wednesday’s media reports of hostile emails sent by Packer to Grounds, meanwhile, could be as much as a year old according to The Australian Financial Review.

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Given Packer’s well-acknowledged temper it's easy to cast Grounds as the victim. But there are those who suggest that Grounds is pretty relaxed about having some time-out from the relationship. As one familiar with the situation said, "Grounds won’t be heartbroken but nor will he let it deteriorate into a fight".

As recently as six months ago UBS got the mandate to undertake a buy-back of Crown Resorts shares - one which it subsequently lost to Goldman Sachs.

Those who know both Packer and Grounds say the latter is superbly good at managing relationships with any number of high-profile billionaires from Kerry Stokes to Frank Lowy.

That said Packer has a long history of purging. Over the years he has severed ties with a number of his executives and business partners including former Crown chairman Robert Rankin, and its former chief executive Rowan Craigie and even his Hollywood studio partner Brett Ratner.

In an interview last year Packer is reported as saying he had not spoken with Gretel for two years.

Packer’s business partnership with Lawrence Ho came to an end when Crown decided to exit its investment in Macau.

For Grounds and UBS the decade long relationship with Packer would undoubtedly have been a profitable one. Grounds advised Packer on his move to get out of media and various restructures of his gaming empire.

Of the small number of inner-circle relationships that have withstood the test of time, John Alexander has been the most notable survivor - his importance to Packer has been on the ascendancy for the past couple of years after having been what has been described as a very loyal foot soldier. Packer made him executive chairman of Crown last year.

Another is Guy Jalland who runs Packer’s private company. Both had previously been with Packer’s father Kerry.

Those close to Packer and Grounds maintain that it is not in the interests of either to undermine the other. Grounds is a smooth operator and it wouldn’t be good for business to have a blow-up with a client - even a difficult one.

Packer also needs to take care not to make an enemy out of Grounds.

Indeed Packer has enough fires to deal with down at Crown in Melbourne after the Victorian gaming regulator has taken issue with the casino’s trial of blanking buttons on poker machines.

In a statement released earlier this week the regulator said, "Following the Victorian Commission for Gambling and Liquor Regulation’s (VCGLR) investigation into the claims tabled by the federal Member for Denison (Andrew Wilkie) in October 2017, the commission has commenced disciplinary proceedings against the casino operator (Crown). The commission is currently considering information provided by Crown as part of these proceedings and will assess this in determining whether there are grounds for disciplinary action."