Blackstone Group has navigated past the last regulatory block in its way of proceeding with its acquisition bid for beleaguered Australian casino operator, Crown Resorts.
This was confirmed via a filing with the Australian Securities Exchange, where Blackstone was handed written confirmation from the Foreign Investment Review Board (FIRB), confirming that the government was not opposed to the proposed buyout.
The FIRB operates as a non-statutory entity that advises the Australian treasurer and government regarding the country’s foreign investment policy.
This recent approval meets a key requirement of the scheme implementation deed previously publicised by the two parties. Crown has also advised that a scheme meeting with its shareholders will be held shortly.
Even with this approval in hand, various other conditions must still be satisfied for the acquisition to proceed. Crown’s shareholders must accept the offer and endorsements from gaming regulatory authorities and the courts must also be secured. Blackstone recently agreed to a $8.9bn takeover amount after sending various proposals to Crown.
Aside from the price, the offer came bundled with a series of conditions including, but not limited to, completion of expanded further due diligence, the establishment of a binding implementation agreement, and approval from casino regulators in Victoria, New South Wales and Western Australia.
Crown recently re-stated its undisputed recommendation to shareholders to vote in favour of the deal, a sentiment previously shared by the company’s chair, Ziggy Switkowski who said,
“The Crown directors unanimously recommend that Crown shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to the independent expert continuing to conclude that the scheme is in the best interests of Crown shareholders.”
A Murky Past
The Perth casino royal commission created to examine the affairs of the casino operator recently concluded that Crown Resorts is unfit to retain its gaming licence in Western Australia, instructing the company to undergo a two-year remediation exercise, supervised by an independent monitor.
The near 1000-page report detailed a series of concerning findings, including that Crown had failed to minimise gambling-related harm, allowed junkets with criminal associations to operate at its casino, and had not been transparent in its dealings with the state regulator.