Private equity giant Blackstone Group has amended the conditions of its A$8 billion (approx. $6.2 billion) offer for Crown Resorts, saying the Australian casino operator must not lose more licenses from state gambling regulators before the transaction is given the go-ahead.
In February, New South Wales found Crown unfit to hold a license for the casino portion of its luxury resort in Barangaroo, Sydney.
In 2019, NSW officials tapped former Supreme Court Judge Patricia Bergin to lead what turned out to be an 18-month probe into damning money laundering and organized crime links allegations against the casino giant.
The inquiry found that the company had for years facilitated money laundering through two of its bank accounts, associated with Asian organized crime figures, and disregarded the safety of its employees in China where it had aggressively promoted its properties even though casino-style gambling is banned in the mainland. Crown’s advertising practices had resulted in the arrest of 19 staff members in China in 2016.
Last month, Blackstone made an offer for 100% of the Aussie gambling group, valuing it at A$11.85 a share or more than A$8 billion. The buyout firm already owns a 10% stake in the company, which it bought last spring from Crown’s former partner in Macau, Melco Resorts & Entertainment.
Approvals Expected by Q3
Blackstone’s move to amend the conditions of its offer safeguard it against an adverse recommendation, including the cancellation or suspension of Crown’s licenses in Western Australia and Victoria before courts approve the acquisition.
Following the findings of the Bergin Inquiry in NSW, royal commissions into Crown have just commenced in both Western Australia and Victoria. They will examine whether the operator is fit to hold licenses for its casinos in Perth and Melbourne.
In a statement, Crown said that Blackstone expects to receive the necessary regulatory approvals to buy the casino giant from every state it operates properties in by the third quarter of the year. The Victorian and WA royal commissions are expected to deliver their recommendations over Crown’s casino suitability in August and November, respectively.
The casino powerhouse stated that its board of directors is still accessing Blackstone’s offer. Crown’s largest shareholder, James Packer, said earlier this month that his private investment vehicle Consolidated Press Holdings (CPH) is “open to considering, and will independently assess, any suitable transaction for Crown shares that may eventuate” and that it will “closely follow future announcements by the Crown board in relation to the [Blackstone]
Source: Blackstone tweaks conditions for $6 billion Australia Crown Resorts buyout, Reuters, April 13, 2021