SYDNEY, June 16 (Reuters) - Shares of Australian casino company Crown Resorts Ltd CWN.AX posted their biggest intraday jump in seven years on Thursday as investors cheered plans to split the company along geographic lines, ringfencing its struggling Macau assets.
Crown shares rose 15 percent to A$12.95 in morning trading, taking the stock to its highest in 10-months, although it remains well below its 2015 high above A$16.
Australia's No. 1 casino operator, which has a market capitalisation of A$9.3 billion ($6.9 billion), said on Wednesday it may split most of its domestic assets off into a new listed entity to cushion those operations from a slide in business at Asian gambling hub Macau. proposal ended months of uncertainty about Crown's future ownership after local media reported the company's billionaire 53 percent owner, James Packer, was in talks to take the entire company private in concert with private equity interests.
The split would help the market better value the company's Australian business after the stock fell 20 percent in the 12 months leading up to the breakup proposal, said CMC Markets chief strategist Michael McCarthy.
"Macau is the problem, so splitting the business I'd say is a direct result of feedback from private equity players, that they're not interested in financing a privatisation of the Macau business," he said.
In a statement issued by Crown, Packer, who quit the board in 2015, said he fully supported the board's decision to split the business.
The new structure "positions Crown for the next decade as we continue to grow our business and meet the needs of the emerging Asian middle class," he added.
In a note to investors, Citi upgraded its target price of Crown to A$14.70, from A$14.50.
"Whilst there are still many unknowns at this stage we view the proposals as a positive for shareholders," said Citi analyst Rohan Sundram in a note. ($1 = 1.3524 Australian dollars)