Posted on: February 14, 2022, 07:47h.
Last updated on: February 14, 2022, 07:47h.
Crown Resorts has agreed to sell its entire organization to private equity behemoth Blackstone Group in a transaction valued at approximately US$6.3 billion.
After nearly a year of Blackstone pursuing Australia’s largest casino operator, Crown’s Board of Directors announced today that it will proceed with the New York-based investment firm’s most recent offer. Last month, Blackstone pitched Crown with yet another bid — Blackstone’s fourth — that valued the gaming and hospitality company at AU$8.9 billion (US$6.3 billion).
Blackstone will pay AU$13.10 per share in cash for Crown. The accepted bid represents a substantial premium on where Crown shares closed last week at AU$12.38. The stock gained two percent in trading today to close at AU$12.64.
The price appropriately reflects the value of Crown’s world-class assets and global reputation for premium service and experiences. The agreement with Blackstone also highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders,” said Steve McCann, CEO and managing director of Crown Resorts.
Crown owns and operates casino resorts in Melbourne and Perth. It hopes to open its stalled casino floor at its Crown Sydney integrated resort sometime later this year. Regulators in New South Wales sounded numerous alarms through a public inquiry released last year regarding Crown’s suitability to operate a casino in the state. Crown is working diligently with state officials to satisfy those concerns.
Outside of Australia, Crown operates Crown Aspinalls, a high-end private members club in London’s West End. Crown Resorts additionally holds a 50 percent stake in the Aspers Group, which operates four regional casinos in the UK, and also controls a 20 percent ownership position in luxury hotel and dining group Nobu.
Crown Resorts and Blackstone Group explained that the agreed-to acquisition is dependent on shareholder approval and regulatory reviews, but is expected to close in the second quarter of 2022. Should the acquisition be executed, it will mark the end of billionaire James Packer’s involvement with the casino empire he founded in 2007.
Packer inherited the wealth he used to form Crown Resorts from his father Kerry Packer and grandfather Sir Frank Packer. The two late Packers amassed billions through the family’s media conglomerate Consolidated Press Holdings.
Two years after his father’s death, James Packer embarked Consolidated Press into the Australian gaming industry.
While Packer’s early years owning and running casinos were marked with great success, the billionaire’s life in the media — which greatly intensified during his relationship and engagement with Mariah Carey that ended in a nasty split in late 2016 — led to personal difficulties. Citing mental health challenges, Packer resigned as chairman of Crown Resorts in March of 2018.
Packer’s departure came after Crown was accused of illegally marketing its casinos in China. The controversy resulted in several Crown employees being detained in Chinese prisons. The scandal additionally led to Hong Kong billionaire Lawrence Ho separating his Melco Resorts from Crown.
Though Packer has had no official role in Crown since his exit, last year regulators in Australia probing Crown Resorts’ suitability to continue conducting casino gambling in both Sydney and Melbourne found that Packer maintained unjust control over the organization.
Packer maintains a 37 percent stake in Crown, meaning his vote will be critical in Crown reaching the 75 percent shareholder approval threshold for the Blackstone purchase to go through. Blackstone already maintains a 9.99 percent stake in Crown after buying out Melco Resorts in 2020.
Packer would walk away with around $2.35 billion under the Blackstone offer.