Packer strikes deal to remove CPH from Crown business

By Mia Chapman Updated
Blackstone’s bid for Crown still has hurdles to face

A deal with the New South Wales gambling regulator struck by James Packer to reduce his influence over Crown Resorts could help the casino operator retain its Australian casino licences.

The Guardian reports that the NSW Independent Liquor and Gaming Authority said Packer’s private investment vehicle, Consolidated Press Holdings, had agreed to give “a number of undertakings regarding Crown Resorts and its associates”.

The in-principle deal, which ILGA expects will result in a binding written agreement, comes after an inquiry in NSW raised concerns about Packer’s influence over Crown amid royal commissions in Victoria and Western Australia into the company’s operations.

In a report tabled in NSW parliament in February, former judge Patricia Bergin found that Crown Resorts was not fit to run the gigantic new casino it has built at Barangaroo on Sydney Harbour, but set out a pathway for the company to become a suitable operator.

Bergin found that Crown facilitated money laundering that took place at its existing real money casinos in Melbourne and Perth and that junket operators who brought in high rolling gamblers had links to organised crime.

She also criticised Packer’s influence over Crown when he was not on the board of the company, including a secret agreement under which the company shared information with him that was not available to other shareholders and his close involvement with the VIP gambling division, which handled the junkets.

The ILGA said it reached the agreement “following discussions between the regulator and CPH about the Bergin Report, which raised significant concerns over the influence of CPH and Mr Packer, as the dominant shareholder of Crown, on the management and operation of Crown’s Barangaroo casino”.

Under the deal, CPH will not enter into any information sharing agreements with Crown; will be barred from talking to Crown about its operations “other than through public forums”; will not try to appoint nominees to the board until at least October 2024; and will not seek any amendment to the Crow constitution, which would affect the way the company runs its business.

The agreement stops short of requiring CPH to divest any of its 37 per cent shareholding in Crown, although the company is currently subject to a takeover offer by US private equity group Blackstone that would give Packer a way to exit the casino business.

Packer engages Moelis to look after Crown Resorts interests 

Moelis Australia has been engaged by James Packer’s Consolidated Press Holdings to look after its interests in Crown Resorts.

The Australian Financial Review reported in April that it is understood CPH has mandated Moelis to independently assess what to do with the group’s Crown Resorts shareholding, in light of an $11.85 a share indicative offer from Blackstone, a private equity group that already holds a 10 per cent stake in Crown.

Packer’s CPH is Crown Resorts’ biggest shareholder, with a 37 per cent stake, worth $2.95 billion at $11.85 a share.

It’s a plum gig for Moelis, which was last spotted at Crown Resorts when its American parent worked for suitor Wynn Resorts on a takeover bid in 2019.

The gig ensures Moelis will have front row seats to the unfolding Crown situation.

Morgan Stanley and Clayton Utz are in Blackstone’s corner, while UBS and Allen’s work for Crown.

CPH’s options include dealing directly with Blackstone to try to cut a deal, using its stake to try to lure another potential suitor or following the Crown board’s lead.

Blackstone lobbed its $11.85 a share indicative bid a fortnight ago.

The bid comes as Crown is the subject of royal commissions in West Australia and Victoria after the NSW inquiry found that the casino giant was unfit to hold a licence.

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