Blackstone launches $6.2 bn takeover bid for troubled Crown Resorts
Sydney, March 22 (AFP/APP): US private equity giant Blackstone has launched a takeover bid for scandal-tainted Crown Resorts, just weeks after the Australian group was denied a licence to run a multi-billion-dollar Sydney casino, the gaming group said Monday.
Crown shares soared more than 20 percent on the Australian Stock Exchange after the pre-trading announcement it had received the “unsolicited, non-binding and indicative proposal” from Blackstone on Sunday.
The casino operator, which is subject to multiple inquiries into allegations of money-laundering and ties to organised crime, said the bid was for Aus$11.85 per share, valuing the company at Aus$8.02 billion (US$6.2 billion). Crown shares closed up 21 percent at Aus$11.97.
The Blackstone bid came after regulators refused to grant Crown a licence to run its flagship casino in a gleaming 75-storey tower that dominates Sydney’s waterfront owing to suspected links to organised crime.
Authorities acted on the recommendations of a public inquiry, which reported Crown had been “facilitating” money-laundering through so-called “high roller” gambling junkets linked to Chinese triads and other organised criminal groups.
The company and its largest shareholder, media scion James Packer, had been in the spotlight since media reports last year alleged that Crown casinos in Melbourne and Perth were used to launder profits from human trafficking, drugs, child sexual exploitation and terrorism.
State authorities have announced probes into the operations of Crown in the two cities. Crown has also been suffering from a sharp drop in business caused by the coronavirus pandemic Crown’s CEO and three long-time directors resigned in the wake of the Sydney inquiry, while executive chairman Helen Coonan accepted its findings as “warranted” and said steps were being taken to improve the company’s governance, compliance and culture.
The company last week also announced it was ceasing all political donations in Australia. Blackstone already has a 9.99 percent stake in Crown, which it bought in April 2020. It also has made forays into the hotel and casino business and currently owns the Cosmopolitan resort and casino in Las Vegas.
The takeover bid is subject to conditions including due diligence, debt financing and Crown board support. If its takeover bid is successful, Blackstone will have to convince Australian regulators that it is a suitable entity to run casinos in the country. Crown said the board was yet to form a view and “will now commence a process to assess the proposal”.
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