Cosmopolitan of Las Vegas owner Blackstone Group threw a lifeline to troubled Crown Resorts, in the form of a $6.2 billion buyout offer. The rope comes with a substantial string attached—Australian regulators must preserve the (sleazy) Crown casino licenses. Without them, Crown isn’t worth that much, it seems. Heck, it’s not worth that much now: Blackstone’s offer was for $9.15/share, which is 20% higher from the pittance where Crown is trading. The company has already lost its Sydney license, and its ones in Melbourne and Perth are under investigation. Blackstone is quite the high roller at the moment, having just plunked down $6 billion for Extended Stay America (in tandem with Starwood Capital Group). In the meantime, Blackstone may not find it so easy to just demand three Australian casino licenses, given the depths of the problems at Crown, which has been found to have facilitated money laundering, among other sins.
“That’s a material risk to consider,” academic Xinning Xiao told Bloomberg. “The restructuring may take years.” Wynn Resorts has already abandoned one Crown takeover deal and Melco Resorts & Entertainment skedaddled rather than submit itself to Ozzie scrutiny. That leaves Las Vegas Sands. It’s in an expansive mood regarding the Pacific Rim, has $6.25 billion thanks to its sale of Venelazzo, plus another $2.5 billion in the bank. It could outbid Blackstone easily if it so chose. And don’t let the $6.2 billion offer fool you: It’s a substantial discount from where Crown was trading before ethical problems and Covid-19 did a double whammy on its stock value. Blackstone saw a value proposition and stooped like a falcon. As portfolio manager Nathan Bell put it, “Blackstone couldn’t get away with a price like this if the casinos weren’t being affected by Covid and the management issues at the same time.”
“It’s only an opening bid,” Bell added. “It’s a messy situation and offering to acquire a casino is a complex affair at the best of times due to all the regulation.” Still, the already-rich James Packer would find himself $2.3 billion richer if he liquidated his 36% stake at Blackstone’s price. For the time being, he’s keeping mum about the whole affair. Meanwhile, we wait to see if Sands comes off the sidelines and makes this really interesting.
Meet Alfred Liggins. If he gets his wish, the Urban One CEO would be the only African-American casino owner in the U.S. But first the broadcasting mogul has to beat out five other contenders for Richmond, Virginia‘s gaming license. Although his plan for “One” is modest: 150 hotel rooms, a showroom and dining (albeit with a powerful Live Nation alliance), Liggins believes that, as one reporter puts it, “the incoming revenue could rival Urban One’s radio and TV business.” Wow, that’d be a pretty lucrative casino. Liggins’ community-empowerment pitch is inspiring even if his casino design isn’t. Back to the drawing board, sir. Also problematic is his choice of operator: Peninsula Pacific, which already has the dominant share of Virginia gambling through Rosie’s slot parlors and Colonial Downs racino. Regulators may want more diversity than that. And Liggins will be going up against Golden Nugget, no slouch as a regional developer. Good luck, Mr. L.
Jottings: Real Bodies at Bally’s Las Vegas, the grossest attraction [sic] on the Las Vegas Strip, is offering free admission to 100 doctors, nurses and first responders on March 30. You think the cadaverous exhibition will get any takers? … Caesars Entertainment is putting $32.5 million of capex into Indiana Grand racino. The expansion will provide elbow room for 100 more slots and 25 additional tables, as well as a World Series of Poker-branded card room. “This investment at Indiana Grand is a testament to our continued commitment to Indiana,” said COO Anthony Carano … Parx Casino‘s site for a satellite facility fell into a sinkhole—literally. That’s forcing Greenwood Racing to fall back on Plan B locations, including a former Lowe’s big-box store. So vast is the space that Parx would lease some of it out for other uses … There was a silver lining in February’s revenue numbers for Harrah’s New Orleans. They were hardly great but it was the only Louisiana casino to post higher grosses than in January … Foxwoods Resort Casino has a new boss, Jason Guyot, the first tribal member to become CEO. He succeeds the short-tenured John James, and proved his mettle with an 11-month stint as interim CEO. He inherits the challenge of striking a sports-betting deal with Connecticut Gov. Ned Lamont (D), whose terms with Mohegan Sun have been rejected by Foxwoods … Hotel occupancy in the U.S. continues to improve, reaching 52% March 7-13. ADRs were $102 and room revenue improved to $53. It’s an easy comparison as hotels are now measuring their performance against the Great Shutdown. Tampa was tops (72%) and Boston last (33.5%).
