Crown Resorts off the ASX as Blackstone takeover confirmed

Crown Resorts has officially ended its 15 years on the Australian Stock Exchange following confirmation of its takeover by US private equity giant Blackstone.

Australian Financial Review reports that Blackstone has pledged to commit significant capital to rebuild Crown Resorts after the $8.9 billion takeover was completed on 24 June.

One of Australia’s biggest corporate scandals has ended with a $3.26 billion golden parachute for major shareholder James Packer.

Chris Tynan, Blackstone’s head of real estate, said the private equity firm’s buyout of Crown was its biggest transaction in the Asia-Pacific, and it would sit down with management to nut out an investment plan for its flagship Melbourne casino.

“This is a great opportunity that plays to Blackstone’s strengths, investing significant capital and resources to rebuild Crown into an iconic destination for travel and leisure that everyone can be proud of,” he said.

Blackstone has also appointed a new chairman, Bill McBeath, who used to run The Cosmopolitan in Vegas for the private equity giant.

The stricken group has been in turmoil since mid-2019, when it was revealed it had been doing business with high roller junket operators while having inadequate controls for the prevention of money laundering.

That triggered three separate state inquiries that questioned Mr Packer’s influence over Crown’s operations and found Crown unfit to hold its casino licences in Sydney, Melbourne and Perth.

Blackstone pledges to clean up Crown mess

Each state ultimately let Crown keep its licence under probation, an arrangement Blackstone has inherited.

Mr Tynan pledged to work with management, employees and unions to “continue Crown’s transformation to operate at the highest standards of compliance, governance and integrity.”

The casino group’s final trading day on the ASX comes just two days after Crown and Blackstone were granted a provisional permit to open the gaming floors atop the $2.3 billion Barangaroo Tower on Sydney’s Darling Harbour.

Blackstone said it still did not have a firm opening date for the casino, which was originally planned as a high roller-only salon with a focus on overseas VIPs.

Crown shifted direction amid tough scrutiny on problematic high roller junket operators from gaming and anti-money laundering authorities that are concerned about their links to organised crime in Asia.

The Barangaroo casino is still membership-only, but local punters of any status can apply as long as they can prove the source of their funds and pass other background checks.

Packer nets $3.27B as part of Crown sale

Mr Packer’s multibillion-dollar payday from the sale of his 37 per cent stake in Crown Resorts comes almost 18 months after the NSW regulator banned the company from opening the Sydney casino following an explosive inquiry in late 2020.

Mr Packer had gone to great lengths to secure the Sydney licence, pitching the casino project to the then-NSW premier Barry O’Farrell at a lunch at former radio shock-jock Alan Jones’ apartment, and securing the deal without a public tender.

“To the employees, management and the board of Crown Resorts, past and present, it’s been an incredible honour to work with you and I will always look fondly on what we created together, particularly Crown Sydney,” Mr Packer said after the buyout ended Crown’s tenure on the ASX.

“There have been ups and downs and challenges, but today’s final sale to Blackstone is confirmation that we have built one of the country’s best tourism, entertainment and leisure companies, and I am extremely proud of that, thank you to everyone at Crown.”

The reclusive billionaire had been looking to offload his stake, and was facing extra pressure to find a buyer after Victoria’s royal commission into the casino last year ordered him to exit his stake by September 2024 to address his outsized influence over the company.

Crown cleaned out its board and senior executives and spent millions of dollars on new corporate governance systems as part of its plea to NSW, Victorian and West Australian regulators that it was capable of reform and should be allowed to hang on its licences in each state.