Crown vote on $8.9b takeover delayed as Blackstone still awaits gaming approvals

Crown vote on $8.9b takeover delayed as Blackstone still awaits gaming approvals

Photo: Crown Melbourne, via Facebook

Beleaguered casino operator Crown Resorts (ASX: CWN) was due to hold a shareholder vote this Friday to decide on a proposed $8.9 billion takeover from investment manager Blackstone, but it will need to wait another three weeks as the US suitor is yet to receive the relevant gaming authority approvals.

The release did not mention whether Blackstone had yet secured any approvals from gaming authorities where Crown operates, which are in Melbourne and Perth where it has casinos and resorts, as well as Sydney where all but the gaming floor has been opened as the group awaits a licence that was put on the backburner following the NSW Bergin Inquiry

"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 14 February 2022, those approvals have not yet been obtained by Blackstone," Crown stated in a release to the ASX after the market closed yesterday.

"Accordingly, Crown has decided to postpone the Scheme Meeting until 20 May 2022.

"Crown has previously announced on 29 March 2022 that the FIRB (Foreign Investment Review Board) approval condition precedent has been satisfied."

Last month the Perth Casino Royal Commission (PCRC) found Crown was "not suitable" to hold a gaming licence in WA, but as was the case in Victoria the business was effectively deemed too big to fail and has continued operating amidst promises of reform. 

After a woeful financial result in the December half running at a $196.3 million loss, Crown management may be feeling a sense of schadenfreude as competitor The Star Entertainment Group (ASX: SGR) is given a dose of the same medicine it once received as an inquiry continues in NSW revealing similar allegations of junkets, money laundering and a lack of scrutiny over punters with potential criminal links. 

However, regulations have changed in Victoria that could be much more serious for Crown. The company's Melbourne casino previously received a $1 million slap on the wrist for junket conduct, but now the Victorian Gambling and Casino Control Commission (VGCCC) has the ability to penalise the group to the tune of $100 million in relation to a payment process established that evaded Chinese foreign transfer laws, registering vouchers for gambling chips as hotel expenses. 

Under the deal struck between Crown's board and Blackstone, the takeover would be unable to go ahead without approval from each gaming regulatory authority. Another condition for implementation of the scheme is that there is "no gaming regulatory event or material adverse change occurring".

CWN shares are still trading slightly lower than Blackstone's $13.10, and stood at $12.87 before the market opening this morning.

 

 

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