Blackstone nears $6.4bn deal to buy James Packer’s Crown casino group

Crown Resorts has agreed to enter exclusive takeover talks with Blackstone after the US investment firm sweetened its bid to buy the Australian casino operator to about A$8.9bn (US$6.5bn). 

The revised offer values Crown at A$13.10 per share, A$0.60 more per share, or about A$1bn in total, from an earlier proposal Blackstone made to buy the business backed by Australian billionaire James Packer in November.

Blackstone’s latest bid followed multiple attempts to convince the Australian company’s board to accept an offer.

The deal highlighted global investors’ interest in Australian assets despite the Covid-19 pandemic. The market has been one of the most active for mergers and acquisitions over the past year, driven by cheap finance and private capital targeting listed assets including telecoms operators, airports and the funds themselves. That has seen the value of deals rise to record levels.

Crown has been the subject of a bidding war since May between Blackstone and Star Entertainment Group, a smaller casino rival that has pursued a merger.

Star withdrew its interest in July when Australian authorities said Crown could potentially lose its gambling licence following an investigation into money laundering accusations. That threat was lifted in September after the investigation ended and Star expressed interest in reviving its A$12bn merger proposal.

Blackstone will complete its due diligence in the coming days. If it decides to make a binding offer at no less than A$13.10 per share, the bid will be unanimously accepted by Crown’s board, the Australian company said.

“It is the Crown Board’s current unanimous intention to recommend that shareholders vote in favour of the proposal in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the proposed transaction is in the best interests of Crown shareholders,” the company said.

The deal is the latest by Blackstone in the casino sector, after the private equity investor agreed in 2019 to acquire the real estate assets of the Bellagio Hotel and Casino in Las Vegas from MGM for $4.25bn. 

Blackstone, which already owns 9.99 per cent of Crown, moved to buy the whole company after Australian regulators ruled last year that Crown was not fit to operate a new A$2.2bn casino resort in Sydney because of concerns about money laundering and poor corporate governance.

Packer, who owns more than a third of the company’s shares, resigned from Crown’s board in 2018, citing mental health issues. A government-commissioned inquiry has since said that he must cease to “remotely manoeuvre” operations for the best interest of the company.