Blackstone takes $6.3bn gamble on troubled casino operator

A general view of Crown Towers in Melbourne, Australia.

Troubled Australian gaming group Crown Resorts agreed to be taken over by US private equity giant Blackstone.

The Melbourne-based firm said on Monday that its board has backed Blackstone’s A$8.9bn (£4.7bn; $6.3bn) buyout offer.

The deal gives high-profile billionaire James Packer the opportunity to exit the business, which has faced scandals and regulatory scrutiny.

Crown, which runs integrated resorts in Melbourne, Perth and Sydney, previously rejected a lower bid from Blackstone.

Chairman Ziggy Switkowski said the latest offer was more than 10% higher than Blackstone’s initial bid, which it made almost a year ago.

“We believe the Blackstone transaction represents an attractive outcome for shareholders,” he said.

Crown is under scrutiny from regulators, who allege the company had knowingly dealt with criminal organisations then misled authorities about it.

The gambling licence for its flagship casino in Sydney remains suspended more than a year after it was scheduled to open.

Meanwhile, Crown’s casino in Melbourne has been told it must operate under the supervision of a government-appointed manager for two years.

Mr Packer, who has trimmed his stake in the business, still has a 37% share of the company.

He stepped down from Crown’s board in 2018 because of “mental health issues”.

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