US private equity firm Blackstone has won approval from the Federal Court of Australia to proceed with its $8.9-billion acquisition of Crown Resorts.
SS Silver II will acquire Crown Resorts. It is an entity owned by or advised by Blackstone Inc and other Blackstone Group affiliates.
Crown's biggest shareholder, James Packer, will receive $3.36 billion for his 37 per cent stake.
The Federal Court decision was the last step in a scheme of arrangement process between Crown Resorts and Blackstone.
Justice Anderson ruled that he approved the scheme with certain amendments proposed by Crown Resorts’ counsel.
In March this year, Judge O’Bryan ordered that Crown Resort organise a meeting for shareholders to vote on the scheme and allowed that it be run virtually due to the pandemic.
Crown Resort’s counsel asked for and was allowed a postponement of the meeting and hearing to undertake required regulatory approvals to make the scheme effective.
More than 90 per cent of the shareholders met and voted for the scheme to go ahead.
Counsel for Crown Resorts asked for an alteration to the scheme during the hearing.
A Blackstone-related entity was revealed to have previously held about 9.99 per cent of shares in Crown Resorts prior to the scheme and was previously excluded from the scheme.
However, the entity had not become a registered proprietor by the implementation date.
This meant it would be included in the scheme which would contradict the shareholders' decision who did not vote on these exlcuded shares and set back the entire process.
This led to a last-minute call for an alteration to the scheme to exclude these shares so the scheme of arrangement could operate as intended.
The Federal Court is able to allow any alterations to the scheme of arrangement as it sees fit under section 4416.
ASIC who had been informed of the proposed changes had also stated that it had no objection to the scheme going ahead.
Crown Resorts and Blackstone agreed to the alterations in writing.
Several state-based regulatory approvals in NSW, Victoria and WA were required and the last of these approvals was granted last week by the Western Australian Gaming and Wagering Commission and the WA racing and gaming minister Tony Buti.
WA legislation requires that the commission and the minister approve such schemes.
The Perth Casino Royal Commission made several recommendations that have underpinned the conditions that accompanied the approval granted by the Gaming and Wagering Commission and WA’s racing and gaming minister Tony Buti.
“As the prospective new owner of the Perth Casino, Blackstone will be required to meet a number of stringent conditions,” Buti said.
“These conditions align with a number of the recommendations stemming from the recent Perth Casino Royal Commission.”
Conditions placed upon Blackstone mean that new investors cannot be brought into the company structure without approval, that investors cannot interfere with daily operations and that additional auditing, governance and reporting of anti-money laundering and gambling activities will be required.
It will also be required to report any investigations by Australian regulators and authorities.
Blackstone will now take over future shareholdings of Burswood Limited and securities over the casino gaming licence, the site and the resort complex in accordance with the Burswood State Agreement and the Casino Control Act.
Gaming and Wagering Commission chair Lanie Chopping said the commission undertook a large probity investigation before granting approval.
“This detailed and complex process undertaken since the application was submitted last year involved the comprehensive independent assessment of relevant Blackstone entities in accordance with the legislative requirements,” Chopping said.
“The Gaming and Wagering Commission’s probity approval has been granted subject to a number of conditions designed to ensure that the Commission has oversight and the capacity to monitor any change in licensee management or ownership.”
Crown also owns casinos in Melbourne and Sydney.
