Proposed Deal from Blackstone Group
The proposed deal from Blackstone Group is worth approximately $6.2 billion and would buy out all three different Australian hotels and casinos currently operated by Crown Resorts. While worth a significant amount of money, the proposed deal is still a major markdown from the peak of Crown Resorts’s business value nearly a year ago.
Despite the relatively low offer, company shares for Crown Resorts spiked by over 20% following the news of the proposed buyout, with investors excited by the prospect of new ownership. Alongside that would be the reprieve from the struggles that the business has faced with tourism being nearly nonexistent due to the pandemic for nearly a year.
Outside of simply offering a large cash incentive, the takeover from Blackstone could offer the company a major reprieve from the several different regulatory issues that the business has faced from the Australian government. In fact, with the license for its flagship casino in Sydney being stripped and the other two in jeopardy as well, the company has needed outside help now more than ever.
Financial Scandal Faced by Crown Resorts
Crown Resorts is currently amidst serious financial questioning from the Australian government following allegations of money laundering and possible links to organized crime that have put the business in hot water. These allegations led to its Sydney resort losing its gambling license and could lead to more fallout without serious changes by the business at the highest level.
Blackstone is offering the company a complete corporate makeover that could not only save the gambling licenses, but also help to rebound business as travel restrictions finally begin to ease following the nearing end of the pandemic. For Blackstone, the proposed deal with Crown Resorts is one of several plays that the company has made in the hotel and leisure industry in recent months.
The company recently partnered with Sherwood Capital Group for a $6 billion deal to purchase hotel business Extended Stay America Inc. Blackstone also bought out the Bellagio casino and resort in Las Vegas for $4.25 billion back in 2019. The most recent proposed deal with Crown Resorts could further strengthen Blackstone’s growing portfolio of businesses in the hotel and leisure industry as the company predicts a significant economic recovery in 2021.
About the Author
Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.