Crown Resort, The Star merge proposal would create $12bn casino group

A potential $12 billion merger between the Star Entertainment Group and Crown has been called the “BHP of gaming” and could see James Packer walk away as the big winner.

The Star casino and entertainment group has rolled the dice on a $12bn merger with Crown that would result in the mega-company being the “BHP of gaming’’ and lead beleaguered billionaire James Packer to walk away as the big winner.

The proposal would keep both brands operating and would propel the new merged casino giant into the ASX’s top 50 companies with more than 30,000 employees nationally.

Mr Packer is Crown Resorts’ biggest shareholder with 37 per cent of the company and the proposal would allow him to cash in some of his chips while still keeping a place at the table.

The Star’s chief executive, Matt Bekier, said: “This would make us the BHP of gaming and entertainment and put us on the global map, which is where we need to be when borders open.”

Crown resorts owner James Packer could come out of the proposed merger a big winner. Picture: Aaron Francis

Six of the merged company’s 19 luxury hotels would be located in Sydney with gambling high-rollers heading to Crown and mass-market punters buying their chips at The Star. Loyalty cards would work in both.

“I would like to see a boat shuttle across the harbour between the two venues,” Mr Bekier said, before quipping: “Or a cable car.”

The Star’s plans would still include the $1bn investment in two new towers at its existing site in Pyrmont that would deliver a six-star Ritz-Carlton Hotel to Sydney and create 1000 jobs.

Its proposal values Crown Resorts shares at more than $14 and tops offers from American private equity groups Blackstone and Oaktree, which are also in the running to take it over.

Crown Sydney has not been able to open its high-end gaming rooms in its new $2.2bn tower after the Bergin Inquiry found it had been involved in money laundering and had gone into business with junket operators with links to organised crime.

The Star CEO Matt Bekier with the Crown tower at Barangaroo in the background. Picture: Toby Zerna

It is still fronting royal commissions into its activities in Victoria and Western Australia. Any deal would have to be given the green light by gaming regulators in every state and the Australian Competition and Consumer Commission.

Mr Bekier said the company had already begun talks with the ACCC about the proposed merger and believed there was no problem with competition because “the odds are the same in roulette wherever you play it”.

The merged company would take the “best of breed” from directors of both companies to fill its boardroom.

Crown has already lost its chief executive and a string of directors in the wake of the Bergin Inquiry and on Monday announced outgoing Lendlease boss Steve McCann will step in as chief executive.

Mr McCann understands Crown after heading Lendlease when it built the new tower at Barangaroo and knows about casinos from his time playing poker tournaments in them.

His deal with Crown could be his best-ever hand with him getting a guaranteed $5m payout whether a takeover deal happens or not.

Mr Bekier was upbeat about Mr McCann’s pay packet. “Surely that’s how you negotiate a deal package,” he said.