Packer ready for $3B payday as Crown sale draws to a close
All is in readiness for billionaire James Packer to exit Crown Resorts, with a $3.3 billion payout due on June 24.
The Australian Financial Review reports that the Federal Court rubber-stamped private equity giant Blackstone’s takeover of Crown Resorts.
Under the indicative timetable for the deal, June 24 will mark the end of Crown’s 15-year run on the Australian Stock Exchange.
Its shares will be halted from the close of trade that day before the $8.9 billion transaction takes effect on June 24.
Blackstone had offered $13.10 a share for the troubled company, an offer shareholders, including Mr Packer, resoundingly approved in May, but the buyout has faced delays as regulators assessed the private equity firm’s suitability to be a close associate of casinos in Sydney, Melbourne and Perth.
Those approvals finally came through in mid-June, although they had some strings attached, such as state-appointed special managers embedded in the Melbourne and Perth facilities.
Still, the takeover will bookend almost three years of torment for Crown, which Mr Packer’s ill-fated share sale to Melco Resorts, run by his close friend Lawrence Ho, sparked in May 2019.
Melco deal sparked Crown inquiry
The billionaire had opted to sell 19.99 per cent of his then more than 47 per cent stake in Crown to Melco over two tranches for $13 a share.
But this drew the ire of the NSW Independent Liquor and Gaming Authority, which had banned Mr Ho’s father, Stanley Ho, from taking a beneficial interest in Crown’s Barangaroo casino then under-construction in Sydney.
Mr Packer abandoned the second tranche of the share sale, and Melco eventually sold the 9.99 per cent stake it had already acquired under the deal to Blackstone, but the ILGA pressed on with an inquiry into Crown.
The NSW inquiry expanded after media reports revealed Crown had breached anti-money-laundering laws and partnered with junket operators linked to drug and human trafficking.
Crown Sydney expected to open in a few weeks
Crown was eventually deemed unfit to open the Barangaroo casino, and the findings of the NSW inquiry prompted regulators in Victoria and Western Australia to start investigations into the company’s practices in their states.
It led to broad upheaval in the gaming giant, which lost its chief executive, chairman, and several key executives as it battled to convince regulators in three states it was suitable to hold a casino licence.
The NSW government is expected to grant Crown a provisional licence to open the Barangaroo casino, which was completed in late 2020, for the first time before the end of the month.
In mid-June, ILGA chairman Philip Crawford said the Authority found Blackstone suitable to hold a casino licence in NSW and that was “a key step for it to become the operator of Crown Sydney”.
The regulator said probity checks of Blackstone took almost 15 months after the investment management firm launched its first takeover offer in March 2021.
The checks included an in-depth look at Blackstone’s other casino business, Cirsa, and Blackstone’s key people, Mr Crawford said.
“We’ve got the necessary sign-offs from our consultants, and it sounds like the other states are much the same,” he said.
While declared unsuitable for its licences in Perth and Melbourne, Crown and its gaming floors are still open in those cities, albeit under stricter operating conditions and regulatory oversight.
