Crown accepts $9b takeover offer from Blackstone

Crown Resorts has agreed to sell its casino empire to US private equity giant Blackstone for around $8.9 billion in a deal that would see billionaire James Packer finally exit the company he has dominated for over two decades.

The scandal-plagued Crown said it will recommend shareholders accept Blackstone’s offer of $13.10 per share, which it lobbed last month, at a vote to be held in the second quarter of this year.

If approved Crown will cease trading on the ASX and Blackstone, the world’s largest private equity firm, will take over its flagship Melbourne property, its Perth resort and new $2.2 billion hotel and casino tower at Sydney’s Barangaroo.

“The announcement today represents a compelling offer for Crown’s shareholders to consider,” said Crown’s chief executive officer Steve McCann said in a statement. “The price appropriately reflects the value of Crown’s world-class assets and global reputation for premium service and experiences.”

Mr Packer, who owns 37 per cent of the company, will be decisive in the shareholder vote and is set to net $3.26 billion if the sale goes ahead. The media scion is facing regulatory pressure to exit the company, after Victoria’s royal commission recommended last year he be ordered to reduce his stake to below 5 per cent.

Blackstone still needs clearance from gambling regulators in each state Crown operates, and the deal comes after nearly two-and-a-half years of intense scrutiny of Crown’s probity.

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.

Victoria held a royal commission into Crown’s Melbourne property last year and also ruled it unfit to hold its 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.

Two years of high-profile scandals, triggered by a series of reports by The Age and Sydney Morning Herald, led to an almost complete clean-out of Crown’s previous senior management and board.

Blackstone managing director Chris Tynan said the firm was looking forward to completing the transaction.

“Crown plays a pivotal role in Australia’s economy,” Mr Tynan said. “We are excited to bring our local expertise and global hospitality and gaming experience to contribute to Australia’s post pandemic recovery and position Crown for future growth.”

Blackstone has extensive casino industry assets, including the Bellagio, MGM Grand and until recently Cosmopolitan casinos in Las Vegas, and also owns the Spanish group Cirsa, which has 147 casinos through Spain, Morocco and Latin America.

Blackstone is already Crown’s second biggest shareholder, with a 9.9 per cent stake, and has been stalking the company for almost a year. It made its first takeover offer at $11.85 per share in March 2021, and raised that three times until finally landing at $13.10 in January which convinced Crown’s board to offer it full due diligence.