Crown buyout edges closer
JAMES Packer’s third attempt in less than three years to sell Crown Resorts could be done and dusted by the end of the year after US private equity suitor Blackstone revised its $8bn buyout offer.
But the offer is conditional on the casino giant emerging from two royal commissions relatively unscathed.
In a statement to the ASX on Tuesday, Crown Resorts said the $11.85 per share scheme of arrangement still contained a stipulation that Blackstone, which currently owns 10 per cent of Crown, would receive approval from regulators in NSW, Victoria and Western Australia to fully buy out the company.
Crown shares closed down 2c at $12.07 on Tuesday.
The offer no longer contained the provision that Blackstone also be deemed a suitable person as licensee.
Blackstone said the offer hinges only on receiving regulatory approval for the takeover, with the additional stipulation that it can withdraw its bid if state regulators threaten to or make “material adverse change” to Crown’s casino licences before the second court hearing of the takeover process.
The date for a second court hearing is not set as Crown is yet to accept the takeover offer, but Blackstone expects it will receive the necessary regulatory approvals to take over Crown in the “third quarter” of the year, clearing the way for a deal to take place sooner than if it had to wait for regulatory confirmation that it was a suitable person as a licensee. It places pressure on Crown to reach a determination on the offer sooner, but it also means Blackstone could take on more regulatory risk if the parties lock in a deal before the respective state governments indicate which recommendations of the royal commissions and inquiries they take up.
The dual Royal Commissions facing Crown in Victoria and WA are due to report in August and November respectively.
The NSW Independent Liquor and Gaming Authority, which found Crown not suitable to operate its Sydney casino in Barangaroo, has said Crown could receive permission to open its Barangaroo casino before the end of the year, subject to conditions.
But until such time as a second court hearing is set Blackstone can walk away from the deal if “Crown’s Vic or WA casino licences is, or is threatened to be, cancelled, suspended or surrendered” before that time or if it looks like its “NSW licence is not to be granted.”
This is also the case if any conditions imposed on Crown by regulators “when combined, constitute a material adverse change” or have “a financial impact on Crown of greater than an agreed threshold”.
Mr Packer (pictured), who owns 37 per cent of Crown Resorts, indicated he is open to the sale and has retained Moelis Australia as an advisor.