June 10, 2022: -Australian gambling regulators have cleared private equity giant Blackstone to manage the troubled casinos of Crown Resorts in the country’s two huge cities, a crucial but primarily expected step in its $6.3 billion buyouts.
The Sydney-listed target of 37% owned by billionaire James Packer has been under pressure for years since getting damaged inquiries found it enabled money laundering. At the same time, Covid-19 lockdowns and border closures battered its profit and shares.
Crown has backed Blackstone’s buyout offer as a way for investors to exit what has become a volatile investment. In contrast, analysts have said the sheen of new ownership might speed up efforts to show regulators it has overhauled its governance.
The new approvals, though widely expected, remove the concern of the buyout facing more regulatory headaches in Crown’s two main markets. Already Crown’s A$2.2 billion Sydney casino has been restricted from taking bets since 2020, while the resort in Melbourne is under government supervision.
Regulators in Perth, where Crown is handling its third casino, which is also under state supervision, have not decided on Blackstone.
Crown’s share price increased nearly 2% to A$12.99 on Thursday, against a 1% decline in the broader market. It is just below Blackstone’s A$13.10 offer, which signals growing buyout expectations.
“These approvals are a key step ensuring Crown Sydney can fully meet its undertakings for major operational, governance, and structural reforms,” said Philip Crawford, chair of the New South Wales Independent Liquor & Gaming Authority suspending Crown’s Sydney gambling license.
“Blackstone is required to demonstrate the highest standards of probity,” he added.
“This commitment is very important to ensure Crown Sydney is free from criminal influence and manages the risks of harm associated with casino activities,” Crawford further said.