U.S. private equity and hedge fund group Blackstone has laid out a number of conditions attached to its AU$8 billion offer for Crown Resorts.
Blackstone wants to bolster a previous condition that regulators confirm its suitability to own and operate Crown casinos in Sydney, Melbourne and Perth.
According to Inside Asian Gaming, the company now wants assurance from each regulatory authority that it can acquire 100 percent of issued Crown shares, and know that neither of Crown’s active gaming licenses in Western Australia or Victoria will be cancelled, suspended, surrendered or otherwise put at risk.
It also wants confirmation that the New South Wales regulator would grant Blackstone a license to operate in Sydney, a privilege denied to Crown0 following the February release of the Bergin Report. That document, which followed a lengthy investigation into Crown operations in the county, found evidence of money laundering and non-compliance at the company’s casinos in Melbourne and Perth.
Asia Gaming Brief reports that Blackstone expects to clear all probity checks by the third quarter of this year. But analysts have said its current offer—which breaks down to AU$11.85 (US$9.01) per share—is too low to gain approval of Crown’s board.
Crown is now under investigation by Royal Commissions in both Western Australia and Victoria. It has undertaken to boost its due diligence and compliance procedures, and has repopulated its board and executive tiers in an attempt to be deemed suitability.
According to GGRAsia, Blackstone’s bid turns on the backing of billionaire James Packer, the company’s largest shareholder at 37 percent. Packer recently hired investment bank Moelis to advise him on his options, which suggests he may be looking for better offers; the bank’s founder, Ken Moelis, advised Packer on a previous failed bid by Wynn Resorts.
In an April 13 filing, Crown said its board “is continuing its assessment” of the Blackstone proposal, “having regard to the value and terms of the proposal and other considerations.” The firm added that Blackstone had also indicated that its proposal was “not conditional on arranging debt financing.”
