Blackstone’s Crown Deal Has Dice Loaded in Its Favor
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Financial markets are often compared to casinos and financiers to gamblers. Sometimes that turns out to be true quite literally: Blackstone is placing a timely bet in Crown Resorts . That bid looks likely to turn out well.
The private equity giant has offered the equivalent of $6.2 billion to buy the troubled Australian casino operator Crown Resorts, according to exchange filings Monday. Blackstone is clearly trying to take advantage of Crown’s recent troubles.
The gambling regulator of New South Wales state said last month that Crown isn’t suitable to hold the license for its new Sydney casino, after a scathing report—which the regulator had commissioned—found the company had . Since then, two royal commissions have been announced to look into Crown’s existing casinos in Melbourne and Perth. Crown’s chief executive has resigned. Billionaire James Packer, who owns more than a third of Crown through his firm Consolidated Press Holdings, may be forced to exit his stake.
Blackstone is no stranger to casinos. For one, it already owns 10% of Crown. It also bought stakes in some Las Vegas resorts and casinos, including Bellagio and MGM Grand from MGM Resorts in 2019 and 2020 and then leased them back to the casino operator. And it bought Cosmopolitan, a Las Vegas hotel and casino that ran into financial trouble, in 2014.
Crown’s prime real estate—its skyscraper casino-hotel in Sydney overlooking the harbor is the city’s tallest building—is surely a good bet all by itself, especially if Blackstone manages to buy at its lowball bid.
