James Packer has been quietly shuffling his shareholdings in PBL between several of his private companies in deals reported on the last trading day before Christmas and on 2 January this year.

In a shareholding change notices to the ASX on 22 December and on 2 January Packer revealed he had transferred more than 6.7 million PBL shares for a total “consideration” of more than $143 million.

On 22 December, as Australia was shutting down for Christmas, the ASX was told that he had received “consideration” of more than $115 million by transferring shares held by one company Ancarac Pty Ltd into companies owned by Cons Press Holdings. The two transactions happened on 20 December.

A total of 5.4 million shares were transferred for a “total consideration” of $24.717 million for 1.238 million shares, and $90.919 million for 4.161 million shares. That made a total of $115.636 million, or $21.41 a share.

In a second shuffle reported on 2 January, Mr Packer transferred 1,238,925 PBL shares held by Cairnton Holdings to Cons Press Holdings for a “consideration” of $27.07 million, and 73,000 PBL shares held by Snowlove Pty Ltd, for $1.595 million. They also went to CPH.

The shares held by Snowlove were James Packer’s only personal holding of PBL shares and were acquired in 2004. Snowlove is also the company he has used to own his fabled Bondi apartment. These deals were done on 22 December and the average price was $21.83, a bit better than the 20 December deals.

It was not clear if the shares were transferred in a notional sense or if Ancarac and Cairnton companies received the cash from Cons Press Holdings. If cash was involved Snowlove received $1.595 million.

In the case of Ancarac, Mr Packer has made a substantial profit by taking the shares in PBL in exchange for the Aspinalls’ stake and then selling them to his main private company. The higher value represents the rise in the PBL share price since the move: the shares were originally priced at $17 when announced around August but they were trading at $21.22 around midday on 22 December. That compares to the value of $21.41 a share in the deals reported to the ASX on 22 December.

The $4.41 per share difference between the allocation price and the sale price is equal to a gross return of 25.8% for Mr Packer: nice, seeing he only held the shares for a couple of months.

Mr Packer has reaped a nice profit on the deal, one which has slightly diluted the holdings of other shareholders. If the independent directors of PBL had insisted on pricing the shares much closer to when Mr Packer proposed to sell them to Cons Press, only around 4.2 million shares would have been needed to pay for the stake in the Aspinalls casinos business in the UK. (That was at the deal price).

Mr Packer timed the sale to Cons Press well: the $21.41 just below the all time high for PBL shares reached a week before on 15 December. PBL shares have fallen $2.45 from that peak to close at $19.95 yesterday. The 2 January deals generated substantial profits: the Snowlove holding costs around half the average suggested in the deal.

If Mr Packer has taken cash (and the deal isn’t notional) then he has raised a significant chunk of money to pay for a new boat, a new London apartment and the other odds and sods he’s been rumoured to be interested in buying recently.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey