Crown Resorts recommends $6.4 billion offer from Blackstone
Crown Resorts has given the go-ahead to a nearly A$9 billion ($6.4 billion) bid from Blackstone Group, ending a year-long battle to take over the Australian-backed casino operator billionaire James Packer.
The cash offer of A$13.10 per share for the casino business is 11% higher than Blackstone’s offer in November and 32% higher than Crown’s share price at that time. Blackstone made four bids for the Australian gambling group with a premium Sydney waterfront property before securing a board recommendation.
The acquisition, if approved by shareholders in the second quarter of the year, is the latest in a series of blockbuster deals in Australia, including a takeover of Sydney airport and a buyout of the “buy now, pay later” company Afterpay, which led to the merger. volumes at record levels.
Blackstone, the world’s largest alternative asset manager with a war chest of $881 billion at the end of 2021, has been suing Crown since March, when it issued an offer of A$11.85 per action.
The fund has been expanding into the casino sector since 2019 when it acquired the real estate assets of the Bellagio Hotel and Casino in Las Vegas from MGM. Chris Tynan, head of Blackstone’s real estate business in Australia, led the transaction.
Crown, founded in the 1990s at a time when the gambling industry was deregulated in parts of Australia, is the country’s largest casino operator. He also owns half of the Aspers casino brand in the UK and a 20% stake in restaurant chain Nobu.
The future of Crown’s business was thrown into doubt last year when an 18-month investigation into its operations led to a critical report by former judge Patricia Bergin which included money laundering by labor unions in the Asian crime in its casinos and the influence and behavior of Packer and the company’s corporate culture.
The report said Crown was not fit to hold a gambling license in Sydney, where it had just completed construction of a A$2.2 billion port complex. As a result, Packer representatives resigned from the board and the company was then given two years to resolve the issues raised in the Bergin report.
Crown soon found itself in the middle of a bidding war between Blackstone, which already owned nearly 10% of the business, and local casino smaller rival Star Entertainment, which pursued an all-share merger but s is withdrawn from the call for tenders.
“Crown’s board and management have made good progress in addressing a number of significant challenges and issues arising from the Covid-19 pandemic and various regulatory processes,” said Crown Chairman, Ziggy Switkowski.
“Nevertheless, uncertainty remains and given these circumstances . . . the all-cash offer provides shareholders with certainty of value.
Packer’s Consolidated Press Holdings is expected to earn more than A$3 billion from the sale.