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Monday, July 4, 2022
Stocks & Shares

Regulators’ nod to Blackstone’s $6.3 billion Crown deal

private equity

The new approvals from regulators covering Sydney in New South Wales and Melbourne in Victoria take Blackstone a step nearer to closing the deal

Australian gambling regulators have cleared private equity giant Blackstone Inc to run the troubled casinos of Crown Resorts Ltd in the country’s two largest cities, a crucial but largely expected step in its $6.3 billion buyout.

The Sydney-listed target that is 37% owned by billionaire James Packer has been under pressure for years since damaging inquiries found it enabled money laundering, while COVID-19 lockdowns and border closures battered its profit and shares.

Crown has since backed Blackstone’s buyout offer as a way for investors to exit what has become a volatile investment, while analysts have said the sheen of new ownership might speed up efforts to show regulators it has overhauled its governance.

The new approvals from regulators covering Sydney in New South Wales and Melbourne in Victoria take Blackstone a step nearer to closing the deal. Though widely expected, they remove concern of further regulatory headaches in Crown’s two main markets.

Already Crown’s $1.58 billion Sydney casino has been banned from taking bets since opening in 2020, while its Melbourne resort is under government supervision.

Regulators in Perth, Western Australia, where Crown operates its third casino, which is also under state supervision, have not made a decision about Blackstone.

In a statement, Crown said only that Blackstone received two regulatory approvals and was awaiting a third. Blackstone declined to comment.

Crown’s share price closed up nearly 2% at $9.25 in Thursday trade, against a 1.4% decline in the broader market. It is hovering just below Blackstone’s $9.33 offer, signalling growing expectation of the buyout going ahead.

These approvals are a key step to ensure Crown Sydney is able to fully meet its undertakings for major operational, governance and structural reforms, said Philip Crawford, chair of the New South Wales Independent Liquor & Gaming Authority, which has suspended Crown’s Sydney gambling licence.

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