Crown Resorts has agreed to be bought by funds associated with and controlled by US private equity giant Blackstone for around $8.9 billion.
Crown and Blackstone have been negotiating for the past month after Blackstone lifted its mooted offer to $13.10 cash for the company in January.
Crown said it would accept if the two parties reached a binding agreement which they did over the weekend.
Crown announced Monday morning that it would enter into an implementation agreement with the huge US investment group.
Crown is recommending shareholders accept the all-cash offer which will see James Packer walk away with around $3.26 billion, and also remove an obstacle to Crown’s licence at Barangaroo finally being greenlit by regulators.
When completed Blackstone will take control of Crown’s Melbourne, Perth resort and $2.2 billion hotel and casino tower at Sydney’s Barangaroo.
Blackstone will still need clearance from gambling regulators in each state and FIRB approval federally.
Crown’s gambling licence for its new Sydney tower remains suspended after a public inquiry ruled in early 2021 that it was unfit to run a casino after finding evidence it had been infiltrated by criminal syndicates and money launderers and that James Packer still had influence in the company despite only being a (the major) shareholder.
Victoria held a royal commission into Crown’s Melbourne property last year and which also found it was unfit to hold a casino licence after uncovering a string of legal and ethical breaches, but did not recommend cancelling the licence because of the damage that would inflict on the state’s economy. Victoria is puttig a new regulatory and oversight structure in Perth.
A third inquiry in Perth into the fitness of Crown to hold the licence of the old Burswood casino (Where there have been reports of money laundering, poor management oversight) has had the timeline for its probe extended till next month.
In a statement with the acceptance announcement, Crown chair, Ziggy Switkowski, said on Monday:
“The Board has fully considered the Blackstone Transaction and unanimously recommends the proposal, subject to customary conditions such as an independent expert concluding the transaction is in the best interests of Crown shareholders and there being no superior proposal.
“When considering any proposal, the Crown Board has consistently stated it is committed to maximising value for Crown shareholders.
“The Crown Board and management have made good progress in addressing a number of significant challenges and issues emerging from the COVID-19 pandemic and various regulatory processes.
“Nevertheless, uncertainty remains and having regard to those circumstances and the underlying value of Crown we believe the Blackstone Transaction represents an attractive outcome for shareholders. The all-cash offer provides shareholders with certainty of value,” the chairman said.
