Blackstone Group has taken action to alter its initial offer for Crown Resorts. It states that the operator should not lose any more licenses. (Image Source: Crownresorts.com.au)
Blackstone Group, a private equity firm has modified the AUD8 billion (approximately $6.2 billion) conditions it earlier set as an offer for Crown Resorts. The reason given by the firm is that it does not want the Australian casino operator to lose further licenses from state gambling authorities before the transaction gets a nod.
An Inquiry with Lots of Revelation
New South Wales found out in February that Crown is not fit to carry a license for the casino unit of its luxury resort located in Barangaroo in Sydney. New South Wales officials tapped Patricia Bergin (a former judge in the Supreme Court) in 2019 to lead a probe into organized crime links and money laundering against Crown Resorts. The probe will later extend into 18 months.
The inquiry by the probe revealed that the Crown Resorts had facilitated money laundering for years via two of its bank accounts. It also stated that the company has disregarded its employees’ safety in China where it promoted its properties aggressively via casino-style gambling which was banned in the mainland. Lastly, the inquiry found out that Crown Resorts was associated with organized crime figures in Asia. 19 members of Crown’s staff were arrested in 2016 in China as a result of the company’s advertising practices.
Blackstone made an offer for a hundred percent of the Aussie gambling group last year, valuing it at more than A$8billion or A$11.85 a share. The buyout company previously owned a ten percent stake in the company which the firm bought last spring from Melco Resorts and Entertainment (former Crown’s partner in Macau).
Expected Approvals by Quarter 3
As Blackstone has moved to modify the conditions of its offers, this will safeguard the firm against adverse recommendations such as suspension or cancellation of Crown’s licenses in Victoria and Western Australia bore the court approves the purchase. In furtherance to the findings of the inquiry in New South Wales, there are now royal commissions into Crown, both in Victoria and Western Australia, which will verify if the operator is fit to carry a license for its casinos in Melbourne, and Perth.
Statement by Crown Resorts
Crown said in a statement that by Q3, Blackstone expects to get the important regulatory approvals to purchase the casino giant in every state where they operate properties. The WA and Victorian royal commissions are both expected to deliver their recommendations on the suitability of Crown’s casino in November and August respectively.
Crown equally mentioned that its BODs are still accessing the offer from Blackstone. Earlier this month, James Packer, Crown’s biggest shareholder stated that CPH (Consolidated Press Holdings), his private investment vehicle is open to considering any suitable transaction or any shares that may eventuate from Crown. He added that they will also independently access the transactions and follow future announcements from Crown that relate to Blackstone.
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