In a letter to Crown Resorts, Blackstone Group has requested a change to the regulatory consent provisions of its proposed buyout, warning that a further licence must not be lost.
The US investment equity firm and its associates proposed to buy the Crown stock it doesn’t currently own for AU$11.85 apiece, valuing the company at AU$8 billion (US$6.1 billion).
The group currently holds a 9.99 percent interest in the Melbourne-based business, which it purchased from Melco Resorts and Entertainment in April 2020 for $8.15 per share.
Crown Sydney Hotel Resort
Following a New South Wales Independent Liquor and Gaming Authority investigation, Crown was deemed incompetent to run the $2.2 billion Crown Sydney Hotel Resort, citing weak corporate governance, inadequate risk-management systems and procedures, and a poor corporate culture.
As a result, prosecutions have been conducted in the Australian states of Victoria and Western Australia, where the organisation still operates.
The initial proposal, announced last month, was said to be contingent on a number of factors, including the signing of a binding “Implementation Agreement” containing various terms and conditions, such as the company receiving regulatory confirmation that a Blackstone-owned Crown is a suitable person to continue to own and operate the Sydney, Melbourne, and Perth licences, and other gaming-related approvals as required.
Changes have been made to the situation, state that: ”Blackstone receive approval from each relevant regulatory authority to acquire 100 per cent of the issued shares in Crown as required under the applicable casino legislation, and framework agreements in each of their respective states.”
It has also set out three additional conditions that must not have occurred by the time of the scheme meeting’s second court hearing, the first of which states that neither of Crown’s licences in Victoria or Western Australia has been, or is threatened to be, cancelled, suspended, or surrendered (or subject to a similar action), and that ILGA confirms, or threatens to confirm, that Crown’s NSW licence has not been revoked (or subject to a similar action).
It also specifies that none of the gaming regulatory authorities must have imposed (or stated or indicated that they intend to impose) terms or conditions on Crown or any of its current or future casino licences or framework agreements that, when taken together, would result in a material adverse change.
Furthermore, in the same two states, no presiding member of any regulatory committee, tribunal, or investigation shall recommend or imply that it will recommend any of the above acts, or anything similar.
By the third quarter of 2021, Blackstone expects to receive probity clearance from both of the state gaming regulators to buy 100 percent of Crown.