Private equity company Blackstone Inc has been given the thumbs up to run Crown casinos. Australian gambling regulators were satisfied with “the highest standards of probity” Blackstone demonstrated and cleared the private equity giant to operate the US$1.58 billion (A$2.2 billion) Barangaroo casino in Sydney and Crown’s Melbourne resort.
Blackstone’s Takeover of Crown Only a Matter of Time
Experts say that these two approvals are crucial and take Blackstone Inc one step closer to completing its US$6.3 billion (A$8.83 billion) buyout of Crown Resorts. Australian billionaire James Packer owns 37% of Crown Resorts and has been under enormous pressure to sell, as the company has had to deal with tons of allegations, including the enabling of money laundering at its casinos.
Blackstone’s offer has been backed by Crown itself, as investors in the company are trying to find ways to leave what they see as a volatile investment. So, these new approvals from the gaming regulators in Sydney and Melbourne will be like music to investors’ ears, as it is now very likely that the Blackstone deal will soon be closed.
Crown also operates a casino in Perth, Western Australia, which is still under supervision by the state’s regulator. However, the WA government is yet to make a decision about Blackstone and whether it will be allowed to operate a third casino in Australia.
That decision will also determine if the Crown buyout will go ahead. Blackstone needs that third and final regulatory approval to finalize its Crown Resorts takeover.
Blackstone offered A$13.10 for each Crown share in its bid and the current Crown share price is at A$13.00, a 2% increase against a declining broader market. That is another indicator that the Blackstone buyout is definitely on the cards and will soon take place.
Blackstone Demonstrated the Highest Standards of Probity
Philip Crawford, chair of NSW Liquor & Gaming, said that the approvals were crucial steps to ensuring that Crown Sydney was able to implement its “major operational, governance, and structural reforms.”
Crawford added that Blackstone was required to “demonstrate the highest standards of probity,” as well as to ensure that Crown Sydney was properly managing gambling harm risks and kept the casino “free from criminal influence.”
The Victorian gambling regulator also confirmed that it approved Blackstone to operate the Melbourne casino, but conditioned their permission with the privately-owned Crown following “stock exchange governance rules.”
As expected, Crown shareholders approved the Blackstone buyout, but they will have to wait for the federal court to green-light the takeover. That will happen only after the gambling regulator in Perth approves the third Crown casino.
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