Blackstone's Crown takeover delayed as firm works on regulator approval; shareholder vote pushed back to late May

Blackstone’s acquisition of Australian gaming giant Crown Resorts is being delayed as the private equity firm awaits the approval required for the transaction. Thus, Crown has decided to push back a shareholder vote on the proposed deal by three weeks.

“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,” the gaming business said in an ASX statement released on Tuesday.

Thus, Crown has now decided to postpone a meeting on the subject until May 20. The shareholder vote was initially scheduled for April 29. The meeting will be held virtually, at 10:00 am, Melbourne time, on the new date.

The company’s board of directors has again “unanimously recommended” that Crown shareholders vote in favor of the transaction “in the absence of a superior proposal” and subject to an independent expert continuing to conclude that the acquisition is in the best interests of shareholders.

Ziggy Switkowski, Crown Chairman

“Subject to the same conditions, each Crown Director who holds Crown shares intends to vote all those shares in favor of the Scheme,” the company stated. Crown shareholders are encouraged to vote either by attending the online scheme meeting or by lodging a proxy form.

Blackstone and Crown had initially set what many labeled an “aggressive timetable” for the A$8.9 billion ($6.3 billion) buyout offer, which some industry observers doubted could be achieved, reports The Sydney Morning Herald. The new announcement would indicate these initial concerns were well-founded, and the scheme of arrangement is now set to be implemented on June 2.

A spokeswoman for private equity giant Blackstone -the world’s largest alternative asset manager with $1.2 trillion in assets under portfolio- said the firm “continues to work constructively with regulators in relation to this transaction” and looked forward to bringing its industry expertise to Australia, further reports the cited source.

In order to finalize the transaction, Blackstone requires regulator approval in each state where the Australian gaming giant has casinos. These include Victoria, NSW and Western Australia, and the Northern Territory, where online betting business BetFair is registered. It has not yet been informed if Blackstone has thus far received clearance in any of these jurisdictions.

Crown Resorts agreed to the takeover offer in February this year, with the company’s board -now chaired by Ziggy Switowski following an entire board replacement amid turmoil and regulatory issues- unanimously backing the proposition, which is 10% higher than a previously rejected one, dated March 2021. Blackstone is already Crown’s second-biggest shareholder, with a 9.9% stake, and has been seeking to buy the company for more than a year now.

“The price appropriately reflects the value of Crown's world-class assets and global reputation for premium service and experiences,” Crown’s Managing Director Steve McCann said at the time. “The agreement with Blackstone also highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders.”

Once completed, the takeover transaction will give high-profile billionaire James Packer -Crown’s major shareholder at a 37% stake in the company- an exit from the Australian giant, bringing an end to his era in the company. Packer has been described in reports as supportive of the deal.