Publication date: May 10, 2021, 08: 18 h.
Last updated: May 10, 2021, 10: 08 h.
Crown Resorts has two offers on the table for casino operations in Australia. The seekers are The Star Entertainment Group and Blackstone Group.
Blackstone, the private equity fund of billionaire Stephen Schwarzman, has been targeting Crown since March. Blackstone is looking to expand its global reach in the gaming industry. The group currently owns the physical assets of several properties on the Las Vegas Strip, including the Bellagio, Cosmopolitan, Mandalay Bay and MGM Grand.
Blackstone initially offered a crown of about 7 Australian dollars. 88 billion ($6.2 billion) in cash for its integrated casino resorts in Perth, Melbourne and Sydney. But Star Entertainment, another licensed commercial gaming operator Down Under, is entering the bidding war with a higher offer of about 9 billion Australian dollars ($7 billion) in stock and cash options.
Blackstone then upped its ante by almost five percent, with the new terms valuing Crown at $6.5 billion. Blackstone is now Crown's second-largest shareholder, with a 10 percent position. Only staunch founder James Packer controls more at 37 percent.
Star hopes to level with rival
Crown Resorts and Star Entertainment have long been rivals in the Australian gaming industry. Both companies own and operate the largest casino resorts there.
Star, the smaller of the two, is looking to merge with Crown after the latter company's recent regulatory woes. Crown opened its $1.7 billion Crown Sydney late last year. However, an investigation by the New South Wales Independent Liquor and Gaming Authority found that the company was unfit to hold a gaming licence. This is because of alleged links to organised crime and shortcomings in preventing money laundering.
In its statement to Crown shareholders, Star claims the merger "would create a national leader in tourism and entertainment."
With a portfolio of world-class properties across four states in some of Australia's most attractive and populated catchment areas and tourist destinations, the combined group would be an attractive investment proposition and one of the largest and most attractive integrated resort operators in the Asia Pacific region, "said Star CEO John O'Neill.
Star believes that combining the two casino operators would provide $150 million in cost savings synergies annually.
Crown Names New CEO
The Crown is in the midst of a series of corporate changes in the wake of the NSW probe.
The company has pledged to stop working with unlicensed junk promoters that have long transported foreign high-roller players to its casino resorts. Crown also reviewed its management from the board level.
Ken Barton resigned as chief executive in February following a damning NSW report which said he was "not a good fit for what is needed at the helm of a casino licensee".
Today Crown announced its successor - Steve McCann. A Crown release says McCann has a 25 - year executive career and comes from Lendlease Corporation, where he has held executive positions since 2005. McCann was formerly CEO of Lendlease, a globally integrated real estate and investment company of 13 years.
"Steve is a first class appointment to Crown and the right person to implement the ongoing reforms needed to restore regulatory and public confidence in our operations," said Crown CEO Helen Coonan. "Recognised as one of Australia's most respected business leaders, Steve has a unique combination of strategic, financial and corporate expertise and experience in building strong employee engagement and driving cultural change."