Crown offloads Nobu stake in deal valuing restaurant group at $1.3b
Crown Resorts has sold its 20 per cent stake in acclaimed Japanese restaurant and hotel chain Nobu – part-owned by Hollywood star Robert De Niro – in a $US180 million deal ($266 million) as the Blackstone-owned casino giant looks to reset its gaming and hospitality business.
The transaction values the entire Nobu business, which Crown acquired a stake in when it was controlled by billionaire James Packer, at $1.3 billion.
Crown is now owned by Blackstone after the investment giant took the company private in an $8.9 billion buyout two years ago. The stake in Nobu was valued at $155.5 million in Crown’s latest financial accounts, published last year. It has been sold into another portfolio company owned by Blackstone’s private equity funds.
The high-profile restaurant chain was established by De Niro with celebrity chef Nobu Matsuhisa and film producer Meir Teper in 1994. The Hollywood star – and prominent Democrat supporter – first encountered Nobu’s wildly popular fusion style in Beverly Hills and later convinced the Japanese chef to open in New York.
Mr Packer later forged a relationship with De Niro during the billionaire’s involvement with film production through the RatPac Entertainment venture he set up with Hollywood director Brett Ratner. Mr Packer subsequently bought the 20 per cent stake in Nobu for $US100 million in 2015.
Nobu now has more than 50 restaurants around the world, and operates more than a dozen hotels, including in London, Barcelona and Las Vegas. Crown hosts Nobu restaurants at its casinos in Sydney, Melbourne and Perth.
Leisure and travel assets are among the “big bets” driving Blackstone’s global strategy, and its biggest Australian asset, Crown, includes casinos and hotels.
But a lack of high rollers after a series of scandals and inquiries into gaming businesses in Australia have left Crown under significant financial stress.
The sale of the Nobu stake will allow Crown to focus on its core assets.
Luxury retail revamp
The company’s chief executive, Ciaran Carruthers, has already embarked on a wide-ranging restructure, and in April Crown began cutting up to 1000 jobs across its three casinos. The latest redundancies follow the axing of 275 roles late last year when Crown was forced to close one of its gaming floors in Sydney in response to low foot traffic.
The company has also lost many high-end foreign gamblers who no longer visit its properties. In Melbourne, Crown has been moving its 2600 poker machines to carded play after introducing its gambling safety measure PlaySafe, which is also expected to hit earnings.
As part of the overhaul. Crown is also busy revamping its luxury retail precincts and its food and beverage offerings in Melbourne and Sydney. It has been in discussions with big brand foreign operators on new outlets here, according to industry sources.
Last month, former Virgin Australia chief executive John Borghetti was appointed Crown’s new chairman, taking over from American casino executive Bill McBeath. Mr Borghetti had been chairman of Crown Sydney since the Blackstone takeover in 2022.
Less well-known is Crown’s fourth casino, Aspinall’s, a high-end private members club in London’s West End entertainment district which has also been posting losses.
But Crown has been whittling back its overall losses. It posted a $199.4 million loss in the 12 months to the end of June last year, down from $945.4 million in 2022. Revenue increased to $2.7 billion from $1.9 billion. Crown took a $20.2 million share of Nobu’s profit last year, while paying the restaurant group a $4.2 million licensing fee.
