Crown sells Nobu stake to concentrate on core assets

Nobu is now valued at $1.3 billion after Crown Resorts offloaded its 20% stake.

The acclaimed Japanese restaurant and hotel chain which is part owned by acting icon Robert De Niro, was sold in a $US180 million deal ($266 million) deal.

The Blackstone-owned entertainment facility is now set for a gaming and hospitality reset. The investment giant took Crown private two years ago in a $8.9 billion buyout and inherited Nobu. Its stake in the restaurant was valued at $155.5 million according to Crown accounts. It has been sold into another portfolio company owned by Blackstone’s private equity funds.

Nobu is a global phenomenon and has been in operation since 1994 when De Niro established the chain with celebrity chef Nobu Matsuhisa and film producer Meir Teper.

There are now more than 50 restaurants around the world.

The sale of Nobu by Blackstone eases some of the financial burden currently faced by Crown after a series of scandals, inquiries and falls in gaming revenue.

Crown can now focus on its core assets. CEO Ciaran Carruthers has initiated an extensive restructuring plan. In April, Crown began cutting up to 1,000 jobs across its three casinos, following the reduction of 275 roles late last year when one of its gaming floors in Sydney closed due to low foot traffic. The company has also seen a decline in visits from high-end foreign gamblers.

In Melbourne, Crown is transitioning its 2,600 poker machines to carded play as part of its PlaySafe gambling safety measure, which is anticipated to impact earnings. Additionally, Crown is revamping its luxury retail precincts and food and beverage offerings in both Melbourne and Sydney. Industry sources report that discussions are ongoing with major foreign brands about new outlets.

Last month, John Borghetti, former Virgin Australia CEO, was appointed as Crown’s new chairman, succeeding American casino executive Bill McBeath. Borghetti had been chairman of Crown Sydney since the Blackstone takeover in 2022.

Crown's lesser-known fourth casino, Aspinall’s, a high-end private members club in London’s West End, has also been experiencing losses. Despite these challenges, Crown has been reducing its overall losses, posting a $199.4 million loss for the 12 months ending in June last year, down from $945.4 million in 2022. Revenue increased from $1.9 billion to $2.7 billion. Crown also earned a $20.2 million share of Nobu’s profit last year while paying the restaurant group a $4.2 million licensing fee.

Jonathan Jackson, 15^th July 2024