Melco Resorts & Entertainment has sold its 9.99% stake in Australia’s Crown Resorts Ltd to an entity owned by American multinational private equity and hedge fund giant The Blackstone Group.
Crown announced the sale in an ASX filing this morning, revealing it had been advised of the purchase of 67,675,000 shares in Crown by The Blackstone Group, representing the entire 9.99% stake held by Melco. The shares were acquired at a price of AU$8.15 (US$5.32) per share.
The sale of Melco’s 9.99% stake, acquired from James Packer’s CPH Crown Holdings Pty Limited last June, comes in the midst of a public inquiry into the acquisition by the NSW Independent Liquor & Gaming Authority, currently postponed due to COVID-19.
The inquiry, launched last August and running since January, had been looking into a range of issues surrounding the transaction, including whether Crown remains a suitable person to retain its restricted gaming license for its AU$2.2 billion Crown Sydney development, due to open in 2021, and whether the disposal of shares to Melco Resorts constitutes a breach of the license or any other regulatory agreement.
Melco had originally planned to acquire a combined 19.99% stake in Crown held by CPH Crown Holdings via two separate tranches but cancelled the second tranche in early February citing a need to focus on its “core assets” as the coronavirus pandemic emerged.
Melco originally acquired the 67,675,000 shares last year at a price of AU$13.00 (US$8.49) per share.
The Blackstone Group is one of America’s largest private equity and hedge fund firms with extensive interests in the gaming and hospitality industries. Those interests include acquisition of The Cosmopolitan in Las Vegas in 2014, a stake in the joint venture that purchased the real estate assets of the Bellagio from MGM Resorts in 2019 and a similar deal with MGM for the real estate assets of MGM Grand and Mandalay Bay earlier this year.
The company previously acquired Hilton Worldwide Holdings in 2007 but had gradually divested its interests in subsequent years before offloading the remainder of its stake in 2018.
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