(Bloomberg) — U.S. private equity giant Blackstone Inc. has won its almost yearlong pursuit of Crown Resorts Ltd. after the troubled Australian casino operator on Monday accepted its A$8.9 billion ($6.4 billion) takeover offer.
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Under the offer, Crown shareholders will receive A$13.10 cash per share. The stock rose 2.8% to A$12.74 in early Sydney trading Monday. A meeting to vote on the offer is expected to be held in the second quarter of the year, Crown said in a statement.
The deal ends a sorry chapter in Crown’s history after it was found unsuitable to run its Sydney casino and given two years to address a litany of wrongdoing at its flagship Melbourne casino, including facilitating money laundering and underpaying taxes.
Nonetheless, if Blackstone can reform Crown and appease regulators, the prize is clear: casino monopolies in two Australian cities and a gleaming A$2.2 billion resort on Sydney’s waterfront.
“We are excited to bring our local expertise and global hospitality and gaming experience to contribute to Australia’s post-pandemic recovery and position Crown for future growth,” Chris Tynan, senior managing director and head of real estate at Blackstone Australia, said in an emailed statement.
The agreement to sell to Blackstone also gives Crown’s biggest shareholder, billionaire James Packer, a clean exit from a company that was once synonymous with his family name. Packer, who owns about 36% of Crown, has largely retreated from corporate life in recent years to deal with mental health issues.
The takeover will also allow Crown’s new board and management including recently appointed Chief Executive Officer Steve McCann and Chairman Ziggy Switkowski to lead the what McCann called the rebuilding of Crown’s “social license” away from the harsh glare of shareholders.
Blackstone made its first approach for Crown in March last year, with an initial offer of A$11.85. That and a subsequent offer in May were rejected as two low. In July, rival Australian casino operator Star Entertainment Group Ltd. scrapped a merger proposal with Crown, while an offer from Oaktree Capital Management LP to fund the buyout of Packer’s stake also didn’t proceed.
The deal still needs approval from Australia’s Foreign Investment Review Board and each of the gaming regulatory bodies of the states Crown operates in, ahead of the shareholder vote. UBS Group AG and Gresham Partners are advising Crown, the company said.
(Adds latest share price in second paragraph, comment from Blackstone in fifth.)
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