Australian billionaire James Packer has made it clear that he will act as kingmaker on any proposal for the sale of casino operator Crown Resorts. The businessman holds a 37% stake in the major group.
In a Tuesday statement, Mr. Packer’s private investment vehicle Consolidated Press Holdings (CPH) said that it is “open to considering, and will independently assess, any suitable transaction for Crown shares that may eventuate.”
CPH’s comments come several weeks after US investment management giant Blackstone Group tabled an offer for 100% of Crown, including its casino properties in Perth and Melbourne and its luxury resort in Sydney.
The offer valued the casino operator at A$11.85 per share or over A$8 billion (approximately $6.2 billion). Blackstone already owns a 10% stake in Crown, which it bought from Melco Resorts & Entertainment in the spring of 2020 at A$9.15 per share or around A$551.6 million.
CPH also said Tuesday that it has tapped Moelis Australia to advise Mr. Packer on the potential sale of his stake in Crown. The appointment of the investment bank indicates that the billionaire businessman is willing to entertain any offer for the casino operator from potential suitors.
CPH noted that it will “closely follow future announcements by the Crown board in relation to the [Blackstone]
CPH further said Tuesday that it “welcomes the Crown board’s announcement that it will commence a process to assess the proposal and it will also engage with relevant stakeholders including regulatory authorities about the proposal.”
Mr. Packer’s private investment vehicle reserving its right to call the shots on any sale of Crown means that the Australian tycoon will likely be the kingmaker in any such deal. Being the company’s top shareholder, he has the voting power to block offers that he does not find satisfactory and spearhead ones that are satisfactory in his view.
Market analysts largely view Blackstone’s bid as too low as the casino operator’s shares jumped higher than the offer price immediately after news about the offer emerged on March 21.
Mr. Packer is believed to have played an instrumental role in negotiating a potential purchase of Crown by Las Vegas casino powerhouse Wynn Resorts in 2019. The price discussed at that time was A$14.75 per share but talks quickly fell apart.
Casino regulators in New South Wales are currently working with Crown to make it suitable to hold a casino license for its Sydney resort. The company has also been facing regulatory inquiries in Victoria and Western Australia following damning allegations that it had for years funneled high rollers from Mainland China to its Australian properties and that some of those players were members of the triads who used Crown’s establishments for money laundering purposes.
The NSW inquiry found that Mr. Packer, as the operator’s largest shareholder, had a “deleterious” influence over its activities and that that influence must be put an end to if Crown wants to become suitable to operate a casino at its Crown Sydney property. State regulators deemed the company unfit for a casino license in a ruling issued in February.
Source: Packer taps Moelis for Crown sale, Australian Financial Review, April 6, 2021