As James Packer squanders another few million dollars of his family fortune on a second over-the-top wedding celebration, PBL’s global casino push is suffering from cost blow-outs and regulatory slam-dunks.

In fact, the day is fast approaching when Westfield shopping centre king Frank Lowy will pass James Packer to become Australia’s richest man. The latest BRW Rich List claims they are worth $7.25 billion and $6.51 billion respectively – but that $650 million gap was identified before the latest casino problems hit PBL.

PBL shares have plummeted more than 10% since BRW came out and today the stock is down another 12c to a three-month low $19.08 in a rising market. This values the Packer family stake at $4.93 billion, well below the recent peak of $5.61 billion on 31 May.

Shares in PBL’s Macau joint venture with Lawrence Ho, Melco PBL Entertainment, have plummeted in recent days after the Chinese Government restricted visa numbers from the mainland into Macau.

Combine that with Friday night’s announcement of a $US350 million cost blowout in the City of Dreams project to $US1.85 billion and James Packer is probably a tad distracted from his wedding celebration.

Surely, this is one of the most embarrassing things a Packer has ever done. You don’t float 20% of a company on the NASDAQ at $US19 a share and then watch it plunge back to almost $US12 six months later in a booming market.

The investors who paid $1.365 billion for these Melco PBL shares are furious about losing almost $500 million on paper. PBL’s residual 40% stake is now only worth about $2 billion – or 15% of its $13 billion market capitalisation.

With such an embarrassing performance in US capital markets, James Packer arguably doesn’t deserve to be Australia’s richest man and Frank Lowy might have just eclipsed him.

Westfield shares have recommenced trading today after last week’s whopping 2-for-23 $3 billion rights issue at $19.50. The Lowys have injected another $282 million into the company and the shares have today fallen 72c to $20.18, valuing their expanded holding of 181 million shares at $3.66 billion.

As the likes of Rupert Murdoch, Tom Cruise, Eddie McGuire and Alan Jones gather for a three-day feast off St Tropez, maybe some joker could propose a toast to “Australia’s second richest man”. That might even be one for James’s close friend David Lowy, who sits on the PBL board.

James must be feeling very thankful he didn’t decide to get married in Macau. Still, he and Rupert can both lament the difficulty of dealing with the Chinese Government and it will be interesting to see if Lawrence Ho or his colourful dad Stanley attend the wedding.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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