James Packer Strikes Deal With Regulator
James Packer has struck a deal with the New South Wales gambling regulator that should help Crown Resorts keep its Australian casino licences.
Packer’s Consolidated Press Holdings (CPH) holds 37% of Crown’s stock, making it the majority shareholder. The vast number of Crown shares CPH owns gives Packer immense voting power and influences critical decisions.
The deal struck with the NSW regulator severely diminishes Packer’s influence over Crown Resorts matters. Packer agreed to give up board seats on Crown until at least October 2024. Furthermore, nobody from Packer’s CPH company can enter information-sharing agreements or initiate discussions about its business or operations.
In addition, the agreement prevents Packer from making any changes to Crown that affects its management or business operations.
Months of Discussions Between packer and NSW Regulator
Packer stepped down from the Crown Board in 2018 but has a CPH representative at all meetings. The Begrin Inquiry was damning of Packer, claiming he exercised real power at Crown, which had “disastrous consequences for the company.”
The Begrin Inquiry deemed Crown unsuitable to hold a casino licence in Sydney. Crown now has a $2.4 billion resort in Barangaroo, where the casino remains under lock and key. The inquiry resulted in the NSW gaming regulator launching a royal commission into Crown’s affair; that is ongoing.
The Independent Liquor and Gaming Authority (ILGA) and Packer have been locked in discussion for several months. Rumours suggested the regulator would force Packer to sell his stake in Crown. The ILGA ultimately decided not to go down this route.
Packer and the regulator agreed Packer would relinquish his voting rights on operational matters. He is, however, free to vote on any takeover offers, which makes him essential in any such deal.
Crown is mulling over an $8 billion offer for its business from American investment group Blackstone. The American investment giant already owns 9.99% of Crown after purchasing the shares from Melco Resorts in late 2020.
Blackstone paid $8.15 per share to Melco but offered $11.85 per share for the rest of Crown’s stock. Blackstone added a break clause to any potential deal only last week. The $8 billion deal will not go ahead if either of Crown’s existing licences are suspended. No deal happens if the NSW regulator does not grant a license for the Sydney property either.
The deal between the NSW regulator and Packer should, in theory at least, smooth out any potential issues.
Who Is James Packer?
Packer is an Australian billionaire with an estimated net worth of $4.69 billion. He is the son of the late Kerry Packer, a media mogul. Packer inherited control of Consolidated Press Holdings and investments in Crown Resorts following his father’s death.
He moved away from the family’s media business and concentrated on Crown Resorts after his father’s death. Packer helped turn Crown into Australia’s biggest gambling and resort group.
Mental health issues resulted in Packer stepping down as executive chairman in March 2018. Packer has bipolar disorder, according to a statement he made to the regulator during the Begrin Inquiry.
It is safe to say Packer likes the finer things in life. A string of high profile relationships, including American superstar Mariah Carey, were all in the headlines. Carey and Packer were engaged in January 16 but split by October. Packer paid Carey a multi-million dollar settlement for an “inconvenience fee.”
His lavish spending, in addition to some failed investments, has cost Packer. He was Australia’s richest man in 2006, thanks to a $7.1 billion net worth. That eye-watering sum dropped to $4.69 billion by 2020.
Packer spent $200 million on a “Giga yacht” in 2019. The 108-meter yacht took five years to build and comes with its own team of staff. Packer is getting his money’s worth, judging by how long he spends on the boat.
Members of the press spotted Packer’s boat anchored next to that of Sheldon Adelson. This sparked rumours Packer was selling Crown to Adelson, rumours both parties denied. That deal is now impossible because Adelson passed away on January 11, 2021.