$3.3bn payday closer for James Packer after Morrison government greenlights Blackstone’s Crown bid

The Packer family’s long-time links to Crown Resorts are closer to ending after no objections were raised to Blackstone’s $8.9bn takeover of the group.

James Packer tours Crown Resorts Barangaroo site under construction in early 2020.

James Packer is a step closer to a $3.3bn payday and ending his family’s decades-long ties to Crown Resorts after the Morrison government raised “no objections” to US private equity giant Blackstone taking over the casino group.

But the deal still faces key hurdles, namely the size of what is expected to be a blockbuster fine over money laundering from the financial crimes regulator.

“The implementation of the scheme remains subject to a number of other conditions, including approval from gaming regulatory authorities, Crown shareholder approval and court approval, as outlined in the scheme implementation deed,” Crown said in a statement.

If Austrac fines the company at least $750m – which would put it in the same territory as anti money laundering penalties slapped on Westpac and Commonwealth Bank – it could trigger an exit clause for Blackstone’s $8.9bn takeover of Crown.

If that happened Mr Packer – who has been forced to sell down his 37 per cent holding in Crown to 5 per cent within two years, in line with the Victorian royal commission’s recommendations – would have to find another buyer.

Blackstone is keen to acquire Crown, having completed extensive due diligence, which included visiting RSL clubs in southwestern Sydney and closely examining their gaming operations.

If the deal proceeds, it will extend Blackstone’s casino empire across five continents, with the group owning gaming complexes in Las Vegas, Latin America, Spain and Morocco.

Crucially, it will allow Mr Packer to save face and end intense scrutiny of his influence over the company.

Blackstone’s offer of $13.10 a share, is 10c higher than the price he agreed to sell a 19.99 per cent holding in Crown to Macau billionaire Lawrence Ho – a man he called his “brother” – in May 2019.

That additional 10c a share from Blackstone puts an extra $25m in Mr Packer’s pocket, valuing his 37 per cent holding at $3.28bn.

The agreement with Mr Ho – which ultimately did not fully proceed – was one of the triggers of high-stakes probe from the NSW Liquor & Gaming Authority, which eventually found that Crown was not yet suitable to hold a casino licence for its $2.4bn complex in Barangaroo.

The inquiry found Crown had facilitated money laundering and other organised crime, casting a spotlight on Australia’s entire casino sector, which included Royal Commission in Victoria and Western Australia as well as fresh inquiry into rival Star Entertainment, which is currently underway in NSW.

In February 2020, Mr Ho abandoned plans to acquire a 19.9 per cent stake in Crown from Mr Packer’s private investment vehicle Consolidated Press Holdings for about $1.76bn over two tranches.

Two months later, Mr Ho sold out of Crown all together, selling is 9.9 per cent stake to private equity giant Blackstone, saying he wanted to focus on his core markets in Macau, The Philippines and Cyprus as well as Melco’s efforts to win a Japanese gaming licence, rather than pursue plans to expand his casino empire to Australia.

Meanwhile, Mr Packer faced the NSW Bergin inquiry in October that year in an extraordinary appearance aboard his $200m yacht where he blamed his ­battle with bipolar disorder for engaging in what he admitted was shameful and disgraceful behaviour.

A year later, Mr Packer appeared at the Western Australia royal commission into Crown where he said he was yet to decide whether he would move into his new $60m apartment at One Barangaroo in the company’s new gaming complex.

The comments reinforced a “funny relationship” he has with Australia’s biggest city, which he shared with The Australian’s Damon Kitney in his 408-page biography The Price of Fortune, published in 2018.

“Truth is, I’m scared of Sydney. I’m scared of the newspapers. I don’t want to be hit any more. I worry whether Sydney will ever feel like home again. There is a lot of pain there for me,” Mr Packer told Kitney.