Shareholder seeks to up Crown stake
As the NSW inquiry into Crown Resorts’ suitability to hold a casino licence in the state nears its conclusion, a shareholder has applied to increase its holding.
The Brisbane Times reports that Crown’s 10 per cent shareholder, Blackstone, has just applied to the NSW regulator to increase its stake, which it acquired from Lawrence Ho’s Melco in April.
The group appears to be positioning itself to have an option to take a controlling interest in the casino group, the report said.
The possibility of James Packer needing to significantly sell down his 36 per cent stake in Crown could leave the share register of Crown potentially in limbo and unstable.
While Blackstone is recognised as a private equity player, it is also well known for its real estate assets, splitting the property assets of companies, including casinos, and retaining or selling the operating business.
If its application to increase its stake in Crown is part of a larger play, it is plausible it could also pursue fellow casino operator The Star down the track in order to bulk up the real estate trust.
Such an outcome would lead to a massive consolidation of casinos in Australia.
It’s early days yet, but it’s fair to assume that the positioning has begun.
And it’s also worth noting that investing in casinos in Australia is a long game.
It can take years to receive probity approvals but for a party considered an investor rather than an operator the process is generally faster and less arduous.
At this point, a major factor in understanding the value of Crown is what an investor would be buying.
The NSW inquiry is delving into Crown, Packer, its board and management.
Former AFL boss grilled by inquiry
A question posed to director Andrew Demetriou on Monday, “What confidence could the regulator in NSW have that it’s appropriate to open the casino in Barangaroo in circumstances where you have just said there are deficiencies in the culture of compliance that you don’t know how long it will take to fix?”
Demetriou whose forceful, even extreme defence, of the company and much of its behaviour departed from that of most previous witnesses, including Mr Packer, insisted the Crown of today was more of a model corporate citizen than the organisation that has been depicted during the course of the inquiry.
He argued that various reviews of Crown’s practices, from its dealings with junkets and money laundering to its culture and compliance made it match fit for the opening of Barangaroo in two months.
It will be a decision the NSW regulator will ultimately need to make.
While the inquiry will be finished with witnesses later this week, Commissioner Patrici Bergin won’t deliver her findings until February.
Convention wisdom to date has been that the Sydney casino will open in December, but as the damaging evidence mounts against Crown’s operation, there will be additional pressure on the regulator to act on an interim basis.
Adding to this pressure was Monday’s revelation that the Victoria regulator had issued Crown with notice requiring it to show cause why disciplinary action should not be taken in relation to an alleged non-compliance with its own internal control statement in relation to junket operations.
Commissioner Bergin said she understood Demetriou’s protestations that the company says it is addressing some of the now well-publicised failings, but added one of the problems the inquiry has faced is that these problems have been exposed on multiple occasions for years.