Crown Resorts Accepts Blackstone US$6.3B Offer for Australia Casino Group
Main Photo: The Crown Promenade Melbourne
Date: February 2022
Name: Crown Resorts, comprising four hotels in Melbourne, three in Perth…and Casinos!
Location: Perth, Melbourne & Sydney in Australia and Aspinalls in London, UK
Number of Keys: 2,395
Seller: Crown Resorts
Buyer: The Blackstone Group
After nearly a year of Blackstone pursuing Australia’s largest casino operator, Crown Resorts, the Australia-listed hotel and casino group, has entered into an agreement with The Blackstone Group, the US listed asset management group, for Blackstone to acquire all shares in Crown at a price of A$13.10 per share in cash, valuing Crown Resorts at US$6.3 billion.
Crown Resorts operates primarily in Australia. It operates through four segments: Crown Melbourne, Crown Perth, Crown Aspinalls, and Wagering & Online. The company owns and operates two integrated resorts, including Crown Melbourne and Crown Perth. Its Crown Melbourne resort comprises 2,628 gaming machines and 540 gaming tables; the Crown Towers Melbourne hotel with 481 guest rooms, the Crown Metropol Melbourne hotel with 658 guest rooms, and the Crown Promenade Melbourne hotel with 465 guest rooms; a conference center; banqueting facilities; restaurants and bars; and designer brands and retail outlets.
The company’s Crown Perth resort includes the Crown Towers Perth hotel with 500 guest rooms; the Crown Metropol Perth hotel comprising 397 guest rooms; the Crown Promenade Perth hotel with 291 guest rooms; 2,500 gaming machines and 350 gaming tables; a 1,500-seat Crown Ballroom and 2,300-seat Crown Theatre; convention facilities; and restaurants and bars, and a resort. It also owns and operates the Crown Aspinalls, a casino in London; and engages in wagering and online social gaming activities.
The price appropriately reflects the value of Crown’s world-class assets and global reputation for premium service and experiences. The agreement with Blackstone also highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders,” said Steve McCann, CEO and managing director of Crown Resorts.
Crown owns and operates casino resorts in Melbourne and Perth. It hopes to open its stalled casino floor at its Crown Sydney integrated resort sometime later this year. Regulators in New South Wales sounded numerous alarms through a public inquiry released last year regarding Crown’s suitability to operate a casino in the state. Crown is working diligently with state officials to satisfy those concerns.
Outside of Australia, Crown operates Crown Aspinalls, a high-end private members club in London’s West End. Crown Resorts additionally holds a 50 percent stake in the Aspers Group, which operates four regional casinos in the UK, and also controls a 20 percent ownership position in a luxury hotel and dining group Nobu.
The sale agreement is dependent on shareholder approval and regulatory reviews, but is expected to close in the second quarter of 2022. Should the acquisition be executed, it will mark the end of billionaire James Packer’s involvement with the casino empire he founded in 2007.Packer inherited the wealth he used to form Crown Resorts from his father, Kerry Packer, and grandfather, Sir Frank Packer. The two late Packers amassed billions through the family’s media conglomerate Consolidated Press Holdings.
Two years after his father’s death, James Packer embarked on moving Consolidated Press into the Australian gaming industry. While Packer’s early years owning and running casinos were marked with great success, the billionaire’s life in the media — which greatly intensified during his relationship and engagement with singer/actress Mariah Carey that ended in a nasty split in late 2016 — led to personal difficulties. Citing mental health challenges, Packer resigned as chairman of Crown Resorts in March of 2018.
Packer’s departure came after Crown was accused of illegally marketing it’s casinos in China. The controversy resulted in several Crown employees being detained in Chinese prisons. The scandal additionally led to Hong Kong billionaire Lawrence Ho separating his Melco Resorts from Crown. Though Packer has had no official role in Crown since his exit, last year regulators in Australia probing Crown Resorts’ suitability to continue conducting casino gambling in Sydney and Melbourne found that Packer maintained unjust control over the organization.
Packer maintains a 37% stake in Crown, meaning his vote will be critical in Crown reaching the 75% shareholder approval threshold for the Blackstone purchase to go through. Blackstone already maintains a 9.99% stake in Crown after buying out Melco Resorts in 2020.
Price: US $6.3 billion – AUD8.9bn
Price per Key: Not applicable as the Casinos form a major part of the deal
THPT Comment: James Packer would walk away with around $2.35 billion under the Blackstone offer. The deal has been awaiting quite a while with some on/off nervous moments. Busy week for Blackstone with their $5.8bn deal for Preferred Apartments in the US!
First Seen: Casino.org
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