Regulators Delay Blackstone’s Crown Takeover Vote
It is more than two months since Crown Resorts accepted an $8.9 billion from Blackstone Group but the deal is no closer to completion. Regulators have not yet approved Blackstone’s Crown takeover, leading to delaying a shareholder vote.
The casino giant’s board of directors accepted the monster-sized offer on February 14. However, any deal requires shareholder approval. The Crown takeover is dead in the water without shareholder approval. Insiders and experts do not envisage any issues with the deal but the all-important shareholder vote will not happen for at least another three weeks.
Crown posted a brief statement to the Australian Securities Exchange (ASX) this week.
“Crown has been informed by Blackstone that, while good progress has been made in obtaining the gaming regulatory approvals required under the terms of the Scheme Implementation Deed dated February 14, those approvals have not yet been obtained by Blackstone. Accordingly, Crown has decided to postpone the Scheme Meeting until May 20. ”
FIRB Has No Objection to Blackstone’s Crown Takeover
The statement comes almost exactly a month after the Foreign Investment Review Board (FIRB) stated it has no objection to Blackstone’s Crown takeover. However, any deal requires Crown shareholders, Gaming Regulatory Authorities, and Court approval. It is that trio of bodies holding up the $8.9 billion deal.
Blackstone is the world’s largest alternative asset manager. It manages $1.2 trillion of assets, including casinos in Las Vegas and South America. Unsurprisingly, money is not an issue for this Goliath.
That said, the firm needs regulatory approval in each state Crown operates. This means New South Wales, Victoria, and Western Australia must give their approval of the Crown takeover. In addition, it needs Northern Territory’s blessing because its online wagering business is registered there.
New South Wales’ Independent Liquor & Gaming Authority (ILGA) is close to completing its assessment. The ILGA chair, Philip Crawford, said in February it is close to finishing looking into Blackstone and it has not found anything preventing the Crown takeover.
Will Shareholder Vote In Favour of the Deal?
Shareholders voting against the Blackstone deal would be a massive surprise and extremely unlikely. Ongoing legal battles dragged Crown Resorts’ previously good name through the mud and back again. The company is still on the hook for record fines of up to $1.2 billion.
Crown’s biggest shareholder, James Packer, holds 37% of the casino giant’s stock. Packer has never hidden away from the fact he wants out of the casino industry. His voting power on such matters is immense. So much so that he is currently banned from interfering with the day-to-day running of the casino and hotel business.
Blackstone already owns 9.99% of Crown’s shares having bought them from Melco Resorts’ Lawrence Ho in April 2020. That equates to 67 million shares, which it paid $8.15 for. The remaining Crown shares are each setting Blackstone back $13.15.
It is difficult to see any regulator preventing the Crown takeover. Regulators wanted immediate changes at Crown and got those with a complete revamp of the board. New owners would be the icing in the proverbial cake.
Crown Should Face No Legal Action After Man Dies Following a Fight
A 29-year-old man died after a fight broke out in the food court at Crown Melbourne. The altercation happened in the early hours of March 27. The casino called the emergency services. They took the Mentone man to hospital in a critical condition but he died four days later from his injuries.
The Homicide Squad is investigating the incident while awaiting results from the post mortem. Police arrested and charged a 26-year-old Highton man with recklessly causing injury.
Initial statements suggest Crown will not face any legal action following the sad death of the man. The incident occurred in an area where a high level of security is not required. In addition, it is believed Crown’s security acted in a quick and efficient manner.
