Crown opening a new casino and rejecting the $8.46 billion deal
The Australian gaming giant Crown Resorts Limited was founded in 2007 and had a market capitalisation of over A$8.7 billion by the end of 2018. The company has two big gambling complexes Crown Melbourne and Crown Perth. The first problems appeared when COVID-19 started. Due to the pandemic, the land-based gambling venues had to be closed and their profit decreased. But the problems didn’t stop there. A bit later Liquor and Gaming New South Wales, an agency responsible for the regulation of liquor, wagering, gaming, and the casino started an investigation and accused the company of breaching some gambling laws.
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Circumstances |
Details |
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Big Troubles |
Crown Sydney had been opened by the end of 2020. This 75-floor skyscraper houses a luxury hotel, residential apartments, signature restaurants, bars, retail outlets, pool and spa facilities, conference rooms. Crown Resorts Limited planned to offer VIP gambling facilities. However, due to the Liquor and Gaming NSW investigation, the opening of the casino has been postponed. |
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Changes to implement |
Despite the problems the company hopes to get a casino license and open the casino early in 2022. To do it Crown Sydney should implement some changes
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The problems started in 2019 with a series of media reports. Then some investigations were undertaken. A royal commission launched in New South Wales reported that Crown or its affiliates are suspected in:
- money-laundering;
- breaching gambling laws;
- partnership with junket operators.
The investigations resulted in the following:
- In August 2021, Crown's license for a new A$2.1 billion Crown Sydney casino was frozen due to the NSW inquiry.
- In October, an Australian inquiry declared Crown Resorts unsuitable to hold a gambling license in Melbourne but allowed it to run its biggest-earning casino under supervision.
However, the company is doing its best to open a new casino this year. According to Reuters, Crown Resorts focuses on opening a number of gambling tables at Crown Sydney at the beginning of this year. New Crown chief executive Steven McCann said: “We’re in frequent discussions with ILGA (Independent Liquor and Gaming Authority) and whilst no official opening date has been confirmed by the regulator, we are currently targeting gaming floor opening early in the new year.”
The Liquor and Gaming NSW reported that Crown had made some good steps in reforming its business and the two were going to open a gaming floor. McCann added: “We believe we have made good progress in implementing the reforms contained in our remediation plan, including those outlined in the Bergin report, and continue to work constructively with the independent monitor.”
Crown Resorts rejected the $8.46 billion deal
In early December 2021, Crown Resort Ltd rejected the third takeover offer from Blackstone Group Inc, a world alternative investment management company. McCann commented: “We do now have an offer. We’ve made it clear that we don’t think that the offer is compelling value. We’ll be looking at every alternative to try and maximise value, but the very first step is getting open in Sydney and making sure the market can see the value of these fantastic assets and get trading up post pandemic.” This confirms Crown's serious plans for development in the Australian market.
- In March 2021, Blackstone that is a 10% shareholder of the casino giant offered to buy all the shares in Crown. They offered A$11.85 per share.
- In May, they offered A$12.35.
- In December they raised their proposal up to A$12.50 per share.
The Crown Resort gave access to non-public information to allow Blackstone to oversee their offer. Blackstone said it was ready to go ahead with a Crown takeover, which implies several investigations from Australian authorities into its business practices, even if those processes are ongoing.
However, the board assured shareholders that it does not mean a new takeover offer will be made or accepted.
The board said: "The Crown board is focused on maximizing value for Crown shareholders and will carefully consider any proposal that is consistent with this objective".
In yearly January, Crown shares were sitting at A$11.74, having lifted by more than 15 percent over the past 12 months.
Crown rebranding: new faces in the management of the company
After sharing their plans for 2023 and rejecting a big deal, Crown has actively started rebranding. It aims to overcome the negative publicity that the company has gained while working in the Australian market. They started with a new management team. There were a number of new appointments made including
- Steven Blackburn as its Chief Compliance and Financial Crime Officer;
- Steve McCann as the new Chief Executive Officer for Sydney Crown Resorts in August;
- Danielle Keighery as the company’s new Chief Corporate Affairs and Brand Officer. She is currently Chief Customer Officer at Bank of Queensland;
- Simon McGrath as the Chief Executive Officer for Crown Sydney. He is currently working as Chief Executive Officer for Accor Pacific.
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Area of Simon McGrath responsibility in Accor SA |
Numbers |
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Staff |
leads 18000+ employees |
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Hotels |
runs 397 hotels |
For the past few months, Crown Resort Ltd has done a lot to rebrand the company and improve the situation. They
- hired a new management team;
- implemented the reforms outlined in their remediation plan;
- work constructively with the independent monitor, etc.
McCann said: “It’s fair to say that the reform programme was well and truly under way before I joined Crown, and we have invested a lot of time and effort since then to continue on that path. I firmly believe the business has turned a corner and has been materially de-risked over the last 6 months.”
While looking forward to opening the gaming floor at Crown Sydney, everyone can enjoy online casino games on their desktop or mobile devices.