Blackstone completes takeover of Crown Resorts

Not long ago, Crown Resort, the most prominent gaming operator in Australia, settled to be taken over by the US private equity company Blackstone. The board of Crown Resorts voted unanimously on the AU$8.9 billion offer. For over two decades, Crown Resort, which operates Crown Melbourne and Crown Perth casinos, was owned by James Parker, who took over the company from his father. In the past, Blackstone was reported to have made a few offers that were denied, and other companies also tried to buy out Crown Resort. However, Crown’s board announced that the AU$8.9 billion was the right offer to be accepted.

Blackstone Private Equity Company

The company was founded back in 1985 and initially was a mergers and acquisitions firm. Today Blackstone is a C-type corporation with headquarters in New York. 

The company made some of the biggest leveraged buyouts back in 2006/7, and some of them include TDC, EQ Office, Travelport, Freescale Semiconductor, United Biscuits, Biomet, and more. They are constantly on the market today, trying to find potential investments.

Previous Bids for the Crown Resort

Crown Resort is one of the newer acquisitions of Blackstone, which will make them majority shareholders. Before anyone ever mentioned the takeover, Blackstone already had a 10% stake in Crown Resort. Because of their involvement in Crown Resort, Blackstone knew how the resort operated, including the potential it holds.

That is why Blackstone had already bid to take over Crown Resort back in 2021, with a deal approximated at AU$12.50 per share. However, back then, the board and James Packer were not happy with the offer, so they refused the proposal.

After the first bid, many other companies tried to cut a deal with Crown Resort, and for Blackstone, there was a grueling 12-month period where they needed to outbid their competition.

Takeover

Fast forward to 2022, Blackstone decided to make a final offer to the board of Crown Resort and James Packer, so they came up with a 4.8% improved offer of AU$13.10 per share or AU$8.9 billion in total. After various meetings and looking at other bids from other companies worldwide, the board decided that the new Blackstone bid was fair and it was time to accept the proposal.

Consolidated Press Holdings, which James Packer owns, has a 36.8% stake in the company. So far, Packer hasn’t publicly said anything about the takeover. However, with his stakes in Crown Resort, he will go out with around AU$3.2 billion. With this offer being accepted, Packer’s family ties with the Crown Resort will come to an end.

James Packer has previously mentioned that he wanted the Crown Resort brand to go global and have locations in Macau and the United States. While he will no longer be able to achieve this, Blackstone can undoubtedly expand the brand and make it more successful worldwide.

Crown Resort Recent Troubles and Investigations

A few years ago, Crown Resort was subject to inquiries regarding money laundering, permitting junkets, and facilitating criminal activities. At first, they were handed a 2-year suspension from their gaming authority. However, after closely working with the Australian government and other regulatory bodies, Crown Resort was allowed to re-open its casinos on a conditional basis.

From 18 months up to 2 years, the management of Crown Resorts will work closely with independent casino commissions and other official representatives, overseeing the casinos' operations. The resort implemented a new business model, various anti-money laundering measures, and changes to corporate culture.

Blackstone will continue working with the Australian government and casino commission to ensure all new changes are implemented and operate according to existing gambling laws. Many modifications will come to the casinos now with Blackstone on board, and hopefully, we won’t see any similar issues happening again.

Of course, other minor changes will also come with the new ownership. Nevertheless, Aussies and other visitors of the Crown Resort can still have the complete gaming experience and expect nothing but fun.

Final Thoughts

Blackstone was a 10% stakeholder even before they acquired Crown Resort, meaning they know how the establishment works. The US company will ensure that all legal reforms are implemented and continue working with country officials. With this takeover, Blackstone will become the primary stakeholder and will try to improve the giant that Crown Resort has been over the years. It will take time to get things back on track, but Blackstone’s representatives are optimistic and ready to start working.

This article is brought to you By Ryan White