Blackstone Clears Final Hurdle in Crown Takeover Bid

Summary

• Gaming regulators in Victoria, NSW, and WA have approved the Blackstone takeover
• The approvals were granted with strict conditions
• Crown Resorts will become a private company if the Federal Court approves the deal

Blackstone’s bid to acquire Crown Resorts has achieved major progress after the gaming regulators in New South Wales (NSW), Victoria, and Western Australia (WA) gave the green light to the $8.9 billion takeover.

The regulators in NSW and Victoria were first to grant their approval on Thursday, June 9. Western Australia, where Crown’s third casino is located, gave the go-ahead to the acquisition just today, June 10.

This means the deal will now go to the Federal Court for ratification. Billionaire businessman James Packer, who has remained a major shareholder of Crown will also be able to officially cut ties with the company if the deal is finally sealed.

Blackstone Takeover Approved but with Strict Conditions

Crown has been the subject of Royal Commission investigations over serious governance failings that led to widespread money laundering and fraudulent practices at its properties. It was ultimately found unfit to hold a gaming license in all three states where its casinos are located – Victoria, NSW, and Western Australia.

In February this year, Crown’s board finally agreed to an $8.9 billion takeover by Blackstone, saying the all-cash offer would benefit all shareholders as it would provide certainty of value. Shareholders voted to approve the sale in May.

Blackstone is one of the world’s biggest private equity firms with investments in a wide range of industries, including food, real estate, and telecommunications. It first approached Crown back in March 2021.

In approving Blackstone’s takeover, the regulator in Victoria laid out several stringent conditions, such as requiring Crown Melbourne’s board to be majority independent, along with improvements in the casino’s reporting of anti-money laundering and responsible gambling activities.

The NSW gaming regulator’s approval also came with requirements to ensure Blackstone follows the recommendations of the Bergin inquiry. Crown has yet to open its Barangaroo casino after being found unsuitable to hold a license in Sydney.

Western Australia’s Gaming and Wagering Commission also gave its approval but with strict conditions, one of which is a requirement for Blackstone’s institutional investors not to be involved in Crown Perth’s day-to-day operations.

Crown Resorts to Become a Private Company

The Federal Court will decide on the matter at a scheduled hearing next week. If the takeover passes through, Blackstone would release a timetable for the completion of the deal. The Federal Court’s approval of the deal would make Crown Resorts a private company, eliminating the need for it to report to the ASX.