James Packer buyout cash offer for Crown Resorts Limited

Australian casino operator Crown Resorts Limited has reportedly been offered up to $2.3 billion in private financing so as to buy back some or all of the 37% shareholding currently owned by company founder James Packer (pictured).

According to separate reports from the Bloomberg and Reuters news services, the proposal from American investment equity giant Oaktree Capital Management LP would see the Melbourne-headquartered casino firm enter into a ‘structured investment’ in order to acquire the shares from Packer’s Consolidated Press Holdings Proprietary Limited (CPHPL) vehicle. The sources detailed that such an arrangement could allow Crown Resorts Limited to partially rehabilitate its image following the recent determination that it was unfit to hold a gambling license for its new Crown Sydney development.

Recovery push:

This judgement from the New South Wales Independent Liquor and Gaming Authority reportedly came after a special inquiry conducted by former New South Wales Supreme Court Judge Patricia Bergin ruled that Packer had potentially exercised undue influence over the day-to-day operations of the company behind the gambling-friendly Crown Melbourne and Crown Perth properties. Crown Resorts Limited is now purportedly seeking to have this verdict reversed and has already agreed to implement a number of reforms including changes to its senior management and improvements to its anti-money laundering procedures.

Individual concessions:

For his part and Packer reportedly inked a deal with the New South Wales regulator last week that will allow him to keep his 37% shareholding in Crown Resorts Limited so long as he agrees to abide by a number of conditions. These include an immediate termination of any information sharing agreements the 53-year-old may have held with the casino firm and a guarantee that he will not seek to exercise the vote tied to his considerable stake except in matters relating to future takeover proposals.

Previous propositions:

Bloomberg reported that Packer, who stepped away from corporate life three years ago so as to fight a mental health battle, has twice abruptly ended talks with potential suitors for his stake in Crown Resorts Limited. The Sydney-born businessman purportedly cancelled a $7.7 billion arrangement with Wynn Resorts Limited early in 2019 before last year walking away from a deal that was to have seen him sell a 20% stake to Melco Resorts and Entertainment Limited.

Ongoing review:

For its part and Reuters reported that the offer from Oaktree Capital Management LP comes less than a month after private equity management firm The Blackstone Group Incorporated proposed paying up to $6.2 billion for the entirety of Crown Resorts Limited’s shareholding. The casino firm’s senior management is now purportedly thought to be considering both propositions while either could potentially see Packer himself walk away with a profit of up to $2.3 billion.