Star Entertainment Group is one of Australia’s largest and most successful corporations. The group has worked on numerous large projects, including The Star Sydney, The Star Gold Coast, and Treasury Brisbane. Queens Wharf Brisbane, which costs more than 3.6 billion dollars, is one of their ongoing projects. It appears that achieving their goal is not a pipe dream for them.
Since 2018, James Packer, Crown Resort’s largest shareholder, has attempted to sell the company, but each time negotiations have failed. First with Wynn Resort, and then with Lawrence Ho’s Melco, by only handing over 10% of the company’s shares, despite his agreement for 20%.
The battle for the Crown Resort had been raging for some time between Star, Blackstone, and Oaktree. In 2021, three major corporations, Black Stone, Oaktree, and, of course, Star Entertainment Group, were all vying for a 10% stake in Crown Resort, which James Packer owned. Even after three of Crown’s casinos closed, they continued to show interest in Crown Resort. But things quickly changed.
What Happened That Made All Other Companies Withdraw Their Bid?
A few months back, Star Entertainment joined the battle for Crown Resort spectacularly by making a massive bid of $12 billion dollars. The merger proposal smashed all other bids and proposals that Blackstone and Oaktree had. Things were looking good for Crown for a while. However, suddenly Royal Commission has announced a statement that made all three contesters including Star Entertainment Group withdraw their bids!
The Royal Commission believes Crown Resort is involved in a variety of illegal activities, including money laundering. The Crown Resort is currently facing a slew of other charges. Crown has been informed that they are ineligible to hold a gambling license in Sydney for the casino. The organization has been working on the structure for nearly a decade. They will, however, be unable to hold a license unless they make changes to their board of directors and management.
Consequences of Crown Casino’s Illegal Activities
Helen Coonan, the executive chairman of Crown Resorts, has also attempted to coerce the royal commission. The chairman threatens Victoria’s gaming minister about the “catastrophic consequences” of his actions if his inquiries are against its Melbourne license. Crown Resort is currently in hot water. Crown’s lifeline, Star Entertainment Group, abandons them after it became unclear whether Crown would be able to keep its license. Star Entertainment Group withdrew its bid and merger proposal, stating, “We continue to believe that a merger could unlock substantial benefits. However, due to the uncertainty surrounding Crown, The Star is unable to proceed with its proposal in its current form as announced.”
They have, however, left a way out for Crown Resort, as they state:
“The Star is still interested in exploring potential value-adding opportunities with Crown. The Star will continue to keep a close eye on the Victorian and Perth royal commissions, with final results expected later this year.”
Crown Resort responds, understanding Star’s reasoning: “Crown remains willing to engage with The Star about a potential merger on terms that are acceptable to both Crown and The Star.”
This was the last time Star and Crown interacted in public. Following that, Crown Resort formally rejected Blackstone’s $8 billion proposals. It remains to be seen whether they will be able to recover from the harm done to them.