Posted on: Mar 29, 2022 8:13 am.
Last updated on: March 29, 2022, 8:14 am.
The Blackstone Group’s A$8.9 billion ($6.6 billion) acquisition of Australian casinos company Crown Resorts cleared its first major regulatory hurdle this week.
Crown Resorts announced today, through a listing application filed with the Australian Stock Exchange, that the US$6.6 billion agreement has received written approval from the Foreign Investment Review Board (FIRB) raising no objections to the proposed programme .
[Crown and Blackstone have] received written confirmation from the Foreign Investment Review Board that the Commonwealth Government has no objection to Blackstone’s proposed acquisition of Crown under the proposed plan,” read the ASX filing.
FIRB is an Australian government agency that reviews major business plans involving foreign individuals or companies. FIRB is an independent entity, but its operation is supported by the Treasury Department.
While the board’s functions are advisory only – meaning it cannot single-handedly block a deal with a foreign company – its recommendations carry great weight with other licensing authorities.
Further permits required
The FIRB’s blessing on the Blackstone Group’s acquisition of Crown Resorts should improve the chances that the two companies will complete their tenure with few headaches. Crown said in its press release that the program is subject to numerous other conditions, including approvals from gaming regulators and Crown shareholders.
Gaming authorities are expected to welcome the Blackstone acquisition. Crown’s reputation has been tarnished in recent years by a variety of issues, such as: B. the allegation of illegally promoting gambling in China, badly damaged.
Crown has since been deemed inappropriate to hold gaming licenses in each of the three Australian states in which it does business – New South Wales, Victoria and Western Australia.
Crown has been allowed to retain its casino licenses in Victoria and Western Australia, where it owns and operates Crown Melbourne and Crown Perth.
NSW officials opted to halt the granting of the gambling concession to Crown for the newly opened Crown Sydney. Crown has been given time to address a plethora of concerns raised in the NSW Inquiry. The VIP casino at the Crown Sydney is hoping to finally open later this year – almost two years after the integrated resort opened as a non-gaming destination in December 2020.
Not a stone unturned
Blackstone, the US-based private equity giant, is hoping to expand its gaming portfolio into Australia. The company has been extremely bullish on gaming during the pandemic.
Shortly before COVID-19, Blackstone agreed to acquire the Bellagio from MGM Resorts for $4.25 billion. Blackstone is now leasing back operations of the headliner on the Las Vegas Strip to MGM.
In January 2020, as the coronavirus became a global concern, Blackstone nevertheless acquired 49.9% of MGM’s Mandalay Bay and MGM Grand Las Vegas. Again, MGM Resorts pays Blackstone rent for its real estate holdings in the properties.
Still not done with gaming, Blackstone completed another sale-leaseback program with MGM last July to acquire Aria and Vdara for $3.89 billion.
After establishing a significant presence on the Las Vegas Strip, Blackstone focused on expanding Down Under. The scheme worked out with Crown did not go exactly as Blackstone had planned, as the company’s original takeover bid for the ailing casino operator was AU$11.85 per share. The agreed $6.6 billion acquisition represents an offer of A$13.10 per share – a premium of almost 11%.