James Packer to roll dice on $8bn Crown bid

James Packer is set to make the biggest bet of his life: whether to cash in his Crown Resorts chips now for $3bn or hold out for a higher offer for his casino.

James Packer has previously indicated he is a willing seller of his stake in Crown

James Packer is set to make the biggest bet of his life: whether to cash in his Crown Resorts chips now for $3bn or hold out for a higher offer for his casino.

Yet if a royal commission called by Victorian Premier Daniel Andrews that starts in Melbourne on Wednesday finds Crown is unfit to hold a gaming ­licence, Mr Packer could be a forced seller at an even deeper discount.

Mr Packer’s Crown is once again in play after New York private equity giant Blackstone Group on Sunday night lobbed an unsolicited $8bn takeover bid for the Australian casino giant.

The move comes at a vulnerable time for Crown, which is being financially battered by the closure of international borders and its high roller casino business through the COVID pandemic.

Significantly, it faces licence reviews and separate royal commissions in Victoria and Western Australia while NSW, which kicked off a review of Crown’s licence last year, has yet to give the green light for gaming operations at its $2bn waterfront facility in Sydney’s Barangaroo.

Crown shares closed 21.4 per cent higher at $11.97 on Monday — their highest level since January last year. Picture: Luis Ascui

Blackstone, which holds just under 10 per cent of Crown, presented an offer to the Crown board on Sunday to buy all the company’s assets in Sydney, Melbourne and Perth for $11.85 cash a share, a 19 per cent premium to the average price of Crown shares since the release of its first half results last month.

Crown shares closed 21.4 per cent higher at $11.97 on Monday — their highest level since January last year.

Monday’s share price surge boosted Mr Packer’s wealth by more than $400m. He is ranked as Australia’s 18th richest person in the The Australian’s Richest 250 with a fortune of $4bn.

The offer — which is con­ditional on debt funding, Crown board approval and regulatory confirmation that a Blackstone-owned Crown would be considered suitable to own and operate its casino licences — values the embattled casino giant at $8.02bn.

This is still a long way short of the near $12bn that Crown’s value peaked at six years ago as it was planning an expansion through Asia and eyeing an entry into the Japanese market.

Mr Packer, who owns about 37 per cent of Crown Resorts through his private investment company, has previously indicated he is a willing seller of his stake in Crown after offloading part of his stake to Melco Resorts in 2019 and negotiating with Wynn Resorts in 2019 for a potential takeover of the company, which did not proceed.

Blackstone’s pitch to the Crown board centres on its ­decade-long history in Australia during which it has invested $14bn, including $12bn in property. Blackstone is already a cas­ino investor, owning the Cosmopolitan casino and the property assets of MGM Resort’s Bellagio casino, both on Las Vegas’s famed strip.

Blackstone made its investment in Crown at the end of April last year when it seized a 10 per cent stake from Lawrence Ho’s Melco Resorts. At the time, it declared a desire to be a helpful and constructive shareholder. It has since remained silent.

Other potential bids could emerge from US casino group Wynn Resorts, which has previously expressed interest, its rival Las Vegas Sands or from Crown’s local rival The Star Entertainment Group. The latter would need approval from the Australian Competition & Consumer Commission.