Blackstone Inc., the private equity giant, had finally succeeded in its bid to take over the troubled Australian Casino operator, Crown Resorts Ltd., after a year-long pursuit, when the company accepted its takeover offer of $6.4 billion ($8.9 billion).
The offer allows the Crown shareholder to receive the US $13.10 per share. Crown shares rose by the US $12.74 in trading on Monday morning in Sydney. As per Bloomberg news, the meeting to vote for the offer will be held in the year’s second quarter.
This deal ends a sad chapter in the history of Crown Resorts after it was considered unsuitable to operate its Sydney Casino and was given two years to clear the litany of wrong activities at is Flagship casino in Melbourne that included acting as a platform for evading taxes and money laundering.
The prize is evident that if Blackstone reforms the Crown and satisfies the regulators, it will have monopolies in two Casinos in Melbourne and Sydney and get a gleaming Sydney Waterfront resort valued at US $2.2 billion Resort.
According to Chris Tynan, head of real estate and senior Managing Director of Blackstone Australia, in an emailed statement, they are excited to bring global hospitality, gaming expertise, and local advantage to contribute to the recovery of Crown’s position in the post-pandemic recovery situation in Australia.
The agreement to sell Crown Resorts allows billionaire James Packer to make a clean exit with a 36% stake. Billionaire packer whose family name was synonymous with Crown has largely withdrawn himself from corporate life owing to mental health issues in recent years.
The takeover will allow the newly appointed CEO Steve McCann and Chairman Ziggy Switkowski with the new board and management to rebuild the Crown’s social acceptance away from its shareholder’s harsh glare.
The initial offer of US $11.85 per share was made by Blackstone in March last year, and Crown rejected another request in May as it was considered too low. The Operator Star Entertainment Group Ltd scrapped a merger deal in July last year. Oaktree Capital Management LP is to also fund the Packers stake buyout also did not materialize.
The deal is pending approval from the Review Board of Australia’s Foreign Investment and gaming regulatory authorities in the states where Crown casino operates. Crown is advised by UBS AG and Gresham Partners.
