Regulatory approvals delay Blackstone’s Crown Resorts takeover

Crown Resorts Melbourne, Victoria

Crown Resorts has disclosed a three-week delay to a scheme meeting regarding the proposed takeover by Blackstone due to regulatory setbacks.

This congregation, which will be held in a virtual setting, will allow James Packer, as well as fellow shareholders that control approximately 64 per cent of the casino and entertainment operator, to vote in favour or against the proposal.

Despite Blackstone reporting that “good progress” has been made in obtaining the gaming regulatory approvals, local media reports that regulatory delays in assessing the merits of the proposed acquisition across New South Wales, Victoria and Western Australia have caused the aforementioned delays.

This follows clearance of a key governmental hurdle after receipt of written confirmation from the Foreign Investment Review Board that the Australian government has no objection to the proposed acquisition was received last month.

However, directors of the Melbourne headquartered group have once again taken the opportunity to reaffirm that they “unanimously recommend” that shareholders vote in favour of the scheme. 

This, it is said, comes in the absence of a superior proposal and subject to an independent expert continuing to conclude that the scheme is in the best interests of the group.

The scheme meeting, that was originally scheduled to held on Friday 29 April 2022, has now been postponed to 10:00am local time on Friday 20 May 2022.

Blackstone, which earlier this year agreed to the A$8.9bn (US$6.3bn) takeover, had made a number of acquisitive overtures to the company over recent months.

This latest revised proposal, made after considering non-public information provided by Crown during initial due diligence, represents a price of A$13.10 cash per share.

This comes in at an increase of $0.60 cash per share compared to the previous offer of $12.50, which was announced to the ASX on November 19, 2021. 

The beleaguered Crown Resorts has been subject to a number of high profile inquiries during recent times.

During 2021, a royal commission was conducted into the company which found that Crown Melbourne wass unsuitable to hold its casino licence and contravened several of its obligations.

However, the group retained its home market casino licence, despite the royal commission deeming the group “unsuitable” on the basis that it engaged in “illegal, dishonest, unethical and exploitative” conduct.

In response, 33 recommendations were issued, including a special manager being appointed to oversee the company’s reform agenda, before suitability will again be assessed after a two-year period.

This followed a ruling along the same lines being made in New South Wales, with a Western Australian royal commission also recently reporting similar findings. 

Earlier this month, the Victorian gambling regulator commenced disciplinary proceedings against Crown Resorts’ Melbourne facility regarding the illegal transfer of funds from China.