Crown Resorts accepts Blackstone’s takeover offer of USD 6.3 billion

Major Australian entertainment group Crown Resorts Ltd has reportedly agreed to a buyout deal of USD 6.3 billion from private equity group Blackstone Inc which already held about 10% of the former.

This deal paves the exit of the company’s largest shareholder, James Packer, from the Australian casino firm besieged by scandals and regulatory setbacks, a decade and a half when he started Crown. The AUSD 13.10 cash per share bid puts Crown below its value in 2019, before COVID-19 restrictions and damaging regulatory probes it encountered.

It is to be noted that due to illegal conduct, the gambling license for Crown's premier AUSD 2.2 billion Sydney-based casino skyscraper is still barred from operating, over a year after it was supposed to start. Whereas the Melbourne casino, the company’s main earner, is mandated to function with a government-appointed supervisor for two years.               

Angus Gluskie, Managing director of White Funds Management, which has Crown shares, stated that a new ownership structure is a critical step in addressing regulatory concerns that have been highlighted.

For the uninitiated, Packer’s journalist grandfather Frank Packer started the Australian Consolidated Press in 1936 which would go on to dominate the country’s media space for over half a century. However, James split the parent company with the goal of turning Crown Ltd into a leader in the casino gambling industry.

Crown soon take a major hit as it tried to expand aggressively in Macau, Las Vegas, and Australia, with 19 of the staff jailed in China for breaking the laws which eventually led to the banning and marketing of gambling.

Blackstone will have multiple legal challenges to tackle if the deal is finalized. The buyout still requires regulatory approval. A major shareholder vote on the matter is expected in the June quarter.

Source credits: https://money.usnews.com/investing/news/articles/2022-02-13/australias-crown-resorts-backs-6-3-billion-blackstone-buyout-offer