Blackstone completes AU$8.87bn Crown Resorts acquisition

| By Richard Mulligan
Private equity giant Blackstone has completed its acquisition of Australian gaming group Crown Resorts Limited.

The deal, worth AU$8.87bn (£5.10bn/€5.87bn/US$6.12bn), will see SS Silver, an entity owned by funds managed or advised by Blackstone, take ownership of the three Crown casino properties in Melbourne, Perth and Sydney.

The completion of the transaction ends a three-year battle for the ownership of Crown, with Las Vegas-based casino operator Wynn Resorts opening talks with the group over a possible acquisition in April 2019.

The group was then the subject of interest from Asian gaming group Melco, but that deal stalled after a probe began into Crown’s operations that ultimately led to it being deemed unsuitable to hold a casino licence in New South Wales, Victoria and Western Australia.

Blackstone completed the acquisition after obtaining approval to run a land-based casino in the states where Crown operates, with shareholders, state regulators and the Federal Court of Australia also approving the deal. Blackstone said it is its biggest ever transaction in Asia.

“We are thrilled to become the new owner of Crown, bringing our expertise in hospitality to help the company achieve its full potential as a leading travel and leisure company,” said Alan Miyasaki, head of real estate acquisitions Asia at Blackstone. “We first invested in Crown two years ago, seeing the tremendous underlying potential of the company and its people.”

“We look forward to working with the teams at Crown and applying our experience in owning and operating marquee hospitality brands around the globe with the highest levels of ethics and integrity to create something unique for employees, local communities, and visitors.”

Blackstone said it will now work with the management team at Crown, employees and unions to ensure the business will “operate at the highest standards of compliance, governance, and integrity”.

“Today, Crown emerges as part of the Blackstone family, which is the start of a new era for this great company and its 20,000 team members,” said Steve McCann, Crown Resort’s chief executive officer. ”Over recent times, Crown has undergone immense transformation, and we know under Blackstone’s ownership, we will realise our vision to deliver world-class entertainment experiences and a safe and responsible gaming environment.”

“Crown’s suite of outstanding assets has built a loyal customer base over the past 28 years, and we are excited about the opportunities ahead of us as we revitalize Melbourne and Perth and celebrate the addition of Sydney. With Blackstone’s investment and expertise, we’re confident Crown will cement its place on the global stage as one of the world’s leading owners and operators of integrated resorts.”

Crown shareholders will be paid $13.10 cash per Crown share now the deal has completed. This payment is in line with the terms of the acquisition offer, which is was approximately AU$8.87bn and was accepted by Crown’s board in January this year after an earlier bid of $8.02bn was rejected in March last year.

The initial offer came at a time when Crown was faced with a number of inquiries. In February 2021, Crown was deemed unsuitable to operate a casino in Barangaroo, Sydney, after an investigation uncovered evidence of money laundering in its facilities.

Later in the year Crown was also ruled unsuitable to operate a casino in Victoria, with an investigation ruling Crown had engaged in “illegal, dishonest, unethical and exploitative” conduct.

Earlier this week, Crown Resorts was given conditional approval to open its Sydney casino, 16 months after being deemed unfit to hold a gaming licence.

The NSW Independent Liquor & Gaming Authority (ILGA) ruled that Crown will be allowed to conditionally begin casino operations, but its operations will be closely monitored during the final phase of the restricted gaming licence suitability assessment that was imposed after the 2021 Bergin Inquiry found Crown unsuitable to hold the licence.

Crown had been prevented from opening the casino in its $2.2bn dining and hotel tower in Barangaroo to gaming patrons for more than a year.

During the initial conditional gaming period, which is scheduled to expire at the end of 2023, Crown will work closely with ILGA and the independent monitor of Crown Sydney, Kroll Associates, to demonstrate its suitability and that it is implementing an agreed remediation action plan.

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