Crown Resorts takeover deal all over bar the shouting

Investment manager Blackstone’s $8.5bn bid launched at Crown is a straightforward, clinical, and opportunistically clever business and investment exercise. Above, a view of the Crown Casino in Melbourne's Southbank. Picture: Getty Images

Is this it? Are we really into the final countdown to the end of James Packer’s near-quarter century dream of building a global gaming empire – a dream that in the last decade turned into a tortured nightmare?

I suggest we are. I suggest the die is now cast; that ownership of the Crown casino group will pass to Blackstone. Plain and simple, it’s now clearly just in everyone’s interest that it does and it will, relatively smoothly.

Further, in a fascinating sidebar, ownership of Crown passing to Blackstone will also complete another circle.

Blackstone’s boss in Australia, the person who has quietly, methodically and unwaveringly pursued Crown through all the turmoil of Packer, China, money laundering, commissions, royal and otherwise, and Covid, is another James, James Carnegie.

This James is also the son of a legendary figure in Australian business – “Rod the God” as he was known, mostly but not entirely affectionately and respectfully, Sir Rod Carnegie.

Sir Rod was a key player in the building of Australia’s resources industry and even more as a fierce campaigner for control of that industry to reside in Australia, and preferably Melbourne, and not as for nearly 200 years, 10,000km away in London.

Sir Rod was CEO of zinc-copper-aluminium and iron ore group CRA, majority-owned by the British RTZ, now Rio Tinto. He asserted a limited and so frustrating but nevertheless still very real independence from the British parent.

It was an independence, such as it importantly was – both for the company and for Australia’s national interest – that evaporated when the Keating government approved the total absorption of the feisty Australian offshoot.

Operational and board control of a very significant part of our industry vanished from Melbourne and indeed Australia and back to “the City”.

That approval came from the very same Paul Keating who was recently lecturing the current prime minister on not finding our future in Asia.

Yes – as Keating so cleverly quipped – Scott Morrison might have “gone back to Cornwall”. But he did so only to an international conference.

Keating in contrast handed control over a big slice of our industry and our ‘future in Asia’ back to the City, to the very living core of the British establishment.

But I digress. Sir Rod was, back in that day, not only CEO of CRA, he was also a partner with two others in property developer Hudson Conway.

One was “Mr Melbourne”, the late Ron Walker, who created and drove the whole Major Events strategy for the city, first for the Kirner Labor government and then the Kennett coalition government. For his beloved Melbourne, Walker was entirely non-partisan.

The other was “Mr Melbourne Cups”, Lloyd Williams.

Yes, the legendary and late Bart Cummings was the Cups King, having trained a spectacular and clearly never to be even approached 12 winners.

But Williams is in his turn, far and away the most successful owner, having owned seven Cup winners, although sadly, not this year’s one. No one else has come close – next best is four – and, like Cummings, no-one is likely ever to either.

Williams is also the man who created and almost literally, brick-by-brick and lavish fixture and fitting, built Crown; in doing so, first with the late Kerry Packer as his – for Kerry, surprisingly silent – partner, he also set the clock ticking on the whole saga of James Packer and his quarter-century journey.

A saga and a journey that is now coming to its end at the hands of James Carnegie, son of Williams’s former partner Sir Rod.

Let me be very clear. James Carnegie, is not being driven by sentiment. The $8.5bn bid launched at Crown is a straightforward, clinical, and opportunistically clever business and investment exercise.

In simple terms Blackstone is the answer to everyone’s needs – the three state governments, WA, Victoria, NSW, their casino and gaming regulatory bodies, even the three inquiries (completed in NSW, processing in Victoria and ongoing in WA), the Crown board and its incoming chairman Ziggy Switkowski, and most of all Crown shareholders and one in particular.

Yes, Packer would undoubtedly like to go back to the pre-Covid and pre-commissions world of 2019 – or better still the pre-scandal world of 2012 – when he could have contemplated a price for his shares north of $14.

But he and we can’t. He should count his lucky stars that someone’s offering him $12.50. And it’s an all-but “done deal” offer when there are so many things that could derail or delay, as they have already, buying something so complicated as a post-China, post-high roller, post-junketing Crown in our “new” post (or living with) Covid world.

Particularly telling were the sentences in the Crown statement of, first, how Blackstone had “engaged” with the regulators in the three states and had all-but got their OKs.

Not that there could be the slightest doubt on that latter point; the regulators would beg to have an investment-focused, non-”entrepreneurial” owner like Blackstone walk in their doors.

And then, second, how it was prepared to proceed with the transaction even if the commissions or their finalisations were ongoing.

Blackstone knows it can live, profitably, with whatever they would now insist on; and even more potently, that the actual reality of Blackstone ownership will intersect positively with those requirements.

The core of the deal, and what brings regulatory and investment dynamics together, is that Blackstone will be turning Crown into a utility, generating steady utility-style returns. High rollers welcome but no longer core.

There is only one potential competitor, but not really, as it would find it harder-to-impossible on every front – Star Entertainment. Most particularly, Star can’t compete in the basic auction, staking its paper against Blackstone cash. The more paper it offered the more it would reduce its offer value.

Maybe, incoming chairman Switkowski might be able to extract a few more cents as the price of endorsement. But it really is all over bar the shouting. And the memories.