Australia’s Crown Resorts Agrees to $6.3 Billion Blackstone Takeover

Blackstone has real-estate assets in Australia and a gambling footprint in other countries and has already amassed a nearly 10% stake in Crown. It first offered to buy the casino operator last March for 11.85 Australian dollars a share and has raised its offer multiple times. At one point, a bidding war erupted when Crown’s Australian rival, Star Entertainment Group Ltd. SGR -1.37% , made its own offer, though Star later dropped its bid.

“Crown plays a pivotal role in Australia’s economy through job creation, investment and as a tourism destination for locals and visitors alike,” said Chris Tynan, senior managing director and head of real estate at Blackstone Australia. “We are excited to bring our local expertise and global hospitality and gaming experience to contribute to Australia’s post-pandemic recovery.”

Crown shares rose 2.3% in Monday trading to 12.67 Australian dollars.

Crown said the Blackstone deal offers shareholders certainty at a time when the company’s business practices are being investigated by regulators, which could strip Crown of its licenses to operate its casinos. One probe by regulators in Western Australia state, which includes Perth, is scheduled to hand down its final report next month.

The opening of Crown’s new casino in Sydney was delayed after a regulatory inquiry found the company wasn’t suitable to operate the casino without significant changes. The inquiry found that bank accounts at Crown were used to launder money, that Crown improperly worked with so-called junket operators in Asia to bring gamblers to Australia, and that it disregarded the welfare of its employees by pursuing high-rollers in China, where Crown employees were eventually arrested for gambling-related crimes.

Another inquiry in Victoria state, which includes Melbourne, found Crown engaged in illegal and dishonest behavior and isn’t suitable in theory to operate a casino, but stopped short of recommending that Crown be stripped of its license. It said closing the casino in Melbourne’s downtown would have negative economic effects.

Crown has recently overhauled its leadership, and Chairman Ziggy Switkowski said the company has made progress in addressing the regulatory issues as well as challenges from Covid-19 lockdowns and travel restrictions. However, Mr. Switkowski said uncertainty remains and that the Blackstone transaction represents an attractive outcome for shareholders.

The Blackstone deal “highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders,” said Chief Executive Steven McCann, who has been on the job for less than a year.

Crown has long been associated with Australian billionaire James Packer, who controls a 37% stake in Crown through his investment company, Consolidated Press Holdings. Mr. Packer once sat on Crown’s board but no longer does so. The regulatory investigation in Sydney criticized Mr. Packer for wielding too much control over the company.

Mr. Packer’s company said in a statement last year that it was open to considering any suitable transaction for Crown shares. A representative for CPH declined to comment on Blackstone’s deal on Monday.

Crown, which also runs a gaming club in London, once had more global ambitions. But it sold off its stake in a Macau casino operator and withdrew from a Las Vegas casino project after its employees were detained in China in 2016.

Write to Mike Cherney at mike.cherney@wsj.com