Disgraced Australian Operator Is Looking for a New Owner
March 25th, 2021 4.00pm
Finally, some good news for Crown Resorts, after a couple of weeks from hell, during which the renowned casino operator lost its New South Wales license. In addition to its Sydney license being revoked, it became the focus of a thorough regulatory investigation conducted in multiple states.
Now, it appears there’s an interested party looking to purchase the Australian company.
Blackstone Group Means Business
The potential buyer is the investment management company Blackstone Group, and it looks like they mean business. Last Sunday, the US giant offered to take over 100% of the gambling operator. The list of properties owned by Crown Resorts includes casinos in Melbourne and Perth, as well as a luxury resort located in Sydney.
The offer values Crown Resorts at £8.65 per share or £4.5 billion in total. It should be noted that Blackstone Group already has a 10% stake in the renowned operator. The percentage was acquired in the spring of last year when the private equity firm paid a little over £402 million for it, representing around £5.94 a share.
Blackstone Group’s offer is subject to several conditions, including the unanimous support from Crown Resorts’ Board and the due diligence and arrangement of the operator’s debt finance.
Will James Packer Accept the Offer?
At this moment, Crown Resorts is controlled by James Packer, the controversial casino mogul, who has a 37% share in the operator. After a scandal involving severe allegations that Crown Resorts enabled high rollers from China to spend millions at its facilities in Australia, Packer has been under pressure to cut his presence in the company.
According to these allegations, which initially emerged in 2019, many of those high rollers were members of the Chinese mafia and used Crown Resorts to launder their money. This forced regulatory bodies in the states where Crown operates to investigate the operator’s activities.
Following a probe conducted by the New South Wales regulator last month, Crown Resorts’ gaming license in this state was revoked. In practice, this means the company won’t be able to operate a gambling venue at its Sydney property anymore.
The Perfect Scenario for Crown Resorts
With all these things in mind, Blackstone Group’s bid and its intention to buy Crown Resorts doesn’t come as a surprise. Many industry experts expected such a scenario. According to available analyses, finding a new owner could be the best solution for the disgraced operator’s current problems. Getting rid of the last piece of his family’s empire will definitely be a difficult move for Packer, but it’s something that needs to be done.
Industry experts believe Blackstone Group could be the perfect buyer for Crown Resorts. First of all, there’s the fact it already has a 10% stake in the company. Secondly, Blackstone has vast experience in the gambling industry, which could prove to be instrumental in guiding the operator through the scandal with Chinese high rollers, which caused all the problems in the first place.
Blackstone Group owns a number of gambling assets across the US, including the famous Las Vegas casino resorts such as the Bellagio and the Cosmopolitan.
Packer thought of divesting his stake in the resort on several occasions. In 2019, the US casino giant Wynn Resort wanted to buy the Australian company and even made a bid of £5.5 billion. However, negotiations quickly broke down.
Commenting on Blackstone’s Group offer, Crown Resorts issued a statement saying it was considering it. But the Australian operator pointed out there were no guarantees the two sides would seal the deal.
This may be the perfect scenario for the disgraced casino operator.