Crown Resorts has given the green light to an almost A$9bn ($6.4bn) offer from the Blackstone Group, ending a year-long battle to take over the Australian casino operator backed by billionaire James Packer.
The cash offer of A$13.10 a share for the casino business is 11 per cent higher than Blackstone’s bid in November and 32 per cent higher than the Crown share price at that time. Blackstone made four offers for the Australian gaming group with a premium Sydney waterfront property before securing a recommendation from the board.
The acquisition, if approved by shareholders in the second quarter of the year, is the latest in a series of blockbuster Australia deals, including a takeover of Sydney Airport and a buyout of “buy now, pay later” company Afterpay, that has driven merger volumes to record levels.
Blackstone, the world’s largest alternative asset manager which had a war chest of $881bn at the end of 2021, has pursued Crown since March, when it launched an A$11.85 per share bid.
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 deal.
Crown, founded in the 1990s at a time when the gambling industry was being deregulated in parts of Australia, is the country’s largest casino operator. It also owns half of the Aspers casino brand in the UK and a 20 per cent 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 that included money laundering by Asian crime syndicates at its casinos and the influence and behaviour of Packer and the company’s corporate culture.
The report said that Crown was not fit to hold a gambling licence in Sydney, where it had just completed the construction of a A$2.2bn harbourside complex. Packer’s representatives stood down from the board as a result and the company was later 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 almost 10 per cent of the business, and smaller local casino rival Star Entertainment, which pursued an all-share merger but pulled out of the bidding.
“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,” said Crown’s chair Ziggy Switkowski.
“Nevertheless, uncertainty remains and having regard to those circumstances . . . the all-cash offer provides shareholders with certainty of value.”
Packer’s Consolidated Press Holdings stands to make more than A$3bn from the sale.