Blackstone bids $6.1b for Australia's Crown Resorts
The Blackstone Group has offered to acquire 100% of Australia-listed casino and hotel operator Crown Resorts for about A$8 billion ($6.1 billion).
The private equity firm is willing to pay A$11.85 per share in cash. The stock spiked 17% to around A$11.60 immediately following confirmation of the offer. It was trading at A$11.84 as of morning March 24, giving the company a market capitalization of A$8 billion.
Blackstone acquired an approximately 10% stake in Crown in April last year from Melco Resorts & Entertainment for A$551.5 million. That transaction, realized via one of Blackstone’s real estate entities, was priced at A$8.15 per share.
The bid comes as Crown faces various class actions and state investigations related to money laundering allegations. These include royal commissions in Victoria and Western Australia launched after the gaming authority in New South Wales found a casino in Sydney was not suited to retain its gaming license.
Since October, Crown has also been under investigation by Austrac, a national financial crimes agency, for possible breaches of anti-money laundering and counterterrorism financing rules. The company said in a filing that the investigation was focusing on the management of “customers identified as high risk and politically exposed persons” at its Melbourne casino.
Local media have specified Austrac’s focus as VIP gamblers brought in by junket operators in China. In November, Crown said it would permanently cease dealing with all junket operators but exceptions could be made for junkets licensed by gaming regulators.
According to a statement, Blackstone’s proposed acquisition is subject regulatory confirmation that Crown will be able to continue gaming-related operations in Sydney, Melbourne, and Perth. Additional conditions include further due diligence and unanimous approval from Crown’s board and directors.
In addition to its three casino-hotels in Sydney, Melbourne, and Perth, Crown owns and operates a casino in London’s West End. It also holds a 50% interest in UK-based casino operator Aspers Group and a 20% interest in US restaurant and hotel chain Nobu. A fourth Australian casino is under development in Melbourne.
Crown also has a number of digital interests, including Betfair Australasia, which claims to be the world’s largest peer-to-peer wagering platform, and DGN Games, an online social games developer. It also has a 50% stake in Chill Gaming, a casino-style games developer targeting younger demographics.
Revenue declined 24% during 2020 to about $2.2 billion, while net profit fell 80% to $81.9 million. This was attributed largely to government-mandated closures of gaming and non-essential services in response to the COVID-19 pandemic.
Blackstone’s global gaming exposure includes the Cosmopolitan casino-resort in Las Vegas and Spain’s Cirsa Gaming. Last year, it completed an acquisition of the MGM Grand and Mandalay Bay casinos in Las Vegas for $4.6 billion via a real estate vehicle.
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