Crown sale’s final hurdle
US PRIVATE equity giant Blackstone is yet to gain approval from gaming regulators in three states for its $8.9bn takeover of Crown Resorts, despite 99.91 per cent of the company’s shareholders – including its biggest investor James Packer – voting overwhelmingly in favour of the deal.
Crown chairman Ziggy Switkowski said Blackstone was still seeking to obtain approvals from casino regulators in NSW, Victoria and Western Australia, which he expected would happen next month.
Once those approvals happen, Mr Packer is set to reap $3.3bn from selling his 37 per cent stake in Crown and ending his family’s decades-old ties with the casino group.
But one shareholder asked if it was “arrogant” to proceed with the vote “before we can even know if any of the three state governments approve a controversial outfit like Blackstone taking control of our politically sensitive company”.
The vote on the $13.10 a share offer – held on Friday morning – had already been delayed once to give Blackstone time to gain the necessary approvals.
Mr Switkowski said the timing of the regulatory approvals, which are key conditions of the deal, was not up to Crown’s board and it should not affect the deal’s “milestones”.
“The regulators in three jurisdictions are still working through, as they must, their various issue,” he said.
“The board considered it was in the interests of shareholders to proceed with the vote today to reduce any potential delays between receipt of the outstanding gaming regulatory approvals and the completion of the transaction, including transfer of funds to shareholders.
“The way the process has developed over the last several months has probably been a bit slower than we had expected because of the nature of the industry and of Crown and the kind of work that has to be done across the jurisdictions.”
The timing of regulatory approvals are difficult to forecast – even from within the regulators. The NSW Independent Liquor & Gaming Authority (ILGA) said in February Crown was set to receive conditional approval in March to open its gaming floor at its new $2.4bn casino complex in Barangaroo.
But three months later, Crown is yet to receive such approval and its Barangaroo gaming floor remains closed.
Mr Switkowksi also refused to weigh in on concerns about Blackstone owning 150 casinos in central and South American casinos in countries where there can be greater regulatory and compliance risks.
Blackstone became a big player in Latin America after it bought casino giant Cirsa from Spanish billionaire Manuel Lao Hernández for an undisclosed sum in early 2018.
“I’m kind of reluctant to continue what is truly an interesting conversation about the world of Blackstone and that of gaming casinos around the world but I think I need to cut it off at that point, so let me do that,” Mr Switkowski said.
Crown has been the subject of three separate inquiries in NSW, Victoria and Western Australia, which all found the company not suitable to hold a casino licence after it facilitated money laundering and other organised crime.