Packer’s Crown exit bid
EMBATTLED casino operator Crown Resorts has finally warmed to a takeover by US private equity giant Blackstone, paving the way for billionaire major shareholder James Packer to offload his 37 per cent stake.
Crown has rebuffed Blackstone twice and refused to engage with rival Star Entertainment over its separate merger proposal – even as it faced the excoriating spotlight of multiple investigations of money laundering at its Melbourne and Perth venues.
Crown last month said it had thrown open its books to Blackstone to allow due diligence, urging it to make a better offer.
That has now unfolded, with the company saying on Thursday that it had received a bid of $13.10 a share, or $8.87bn, up from $12.50 a share previously.
“The Crown board considers that it is in the interests of Crown’s shareholders to engage further with Blackstone on a non-exclusive basis in relation to the revised proposal,” Crown told the ASX.
“Accordingly, Crown has decided to provide Blackstone with the opportunity to finalise its due diligence inquiries and negotiate the terms of an implementation agreement so that Blackstone can put forward a binding offer.”
If that happens, Crown would recommend the offer to shareholders but approval would also be required by casino regulators in Victoria, NSW and Western Australia.
As a result of the damning 2020 NSW inquiry and 2021 Victorian royal commission, Mr Packer is being forced to reduce his stake in Crown to less than 5 per cent.
That first probe found that his influence over the Crown board – despite no longer being part of it – had “disastrous” consequences as he was the driving force to secure more Chinese junket tours at the centre of the scandal.
Mr Packer admitted at last year’s Perth royal commission that he did not attend a single board meeting of Crown Perth’s Burswood Limited between 2013 to 2016 after he moved overseas – the final three years of his chairmanship, which began in 2004.
He conceded there were many “things that should have been done differently” and he should have quit rather than miss those meetings as criminal figures infiltrated Crown’s VIP customer base.
Mr Packer claimed he was “not informed” of the risk of such infiltration until after 19 Crown staff were arrested in
China in 2016 for marketing the business on the mainland, where gambling is illegal. The Perth probe will hear closing submissions next month.
The Victorian royal commission stopped short of stripping Crown Melbourne of its gaming licence, even though it was found not suitable to continue to hold one, instead imposing a two-year deadline to prove to a new “special manager” that it has returned to suitability – effectively putting it on probation.
Crown shares surged more than 8 per cent to $12.65 in intraday trade on Thursday.