Australian casino operator Crown Resorts Ltd says it received a letter from private equity management firm Blackstone Group Inc “setting out a modification” to some of the terms in the latter’s proposal to acquire all of the shares in Crown. The conditions now added to the proposal are related to the gaming licences that Crown holds in three Australian states, according to a Tuesday filing.
Crown said in late March it had received “an unsolicited, non-binding and indicative proposal” from Blackstone Group, at an “indicative price” of AUD11.85 (US$9.01) per share. Blackstone’s proposal valued the deal at more than AUD8.02 billion, based on the Australian firm’s outstanding shares
The proposal was subject to a number of conditions, “including a condition that Blackstone receive regulatory confirmation that a Blackstone-owned Crown is considered a suitable person to continue to own and operate the Sydney, Melbourne and Perth licences and other gaming-related approvals as required.”
In Tuesday’s filing to the Australian Securities Exchange, Crown said it was Blackstone’s expectation that it would receive probity approval from “each of the state gaming regulators by third-quarter 2021.”
Crown said additionally that the regulatory approval condition included in Blackstone’s proposal had now been changed, to add new terms related to the gaming licences.
According to the statement, for the deal to progress, a new condition is that none of Crown’s casino licences in respectively Victoria and Western Australia, “is, or is threatened to be, cancelled, suspended or surrendered (or subject to a similar action).”
It also adds that the deal could fall if the New South Wales Independent Liquor and Gaming Authority (ILGA) “confirms, or threatens to confirm, that Crown’s New South Wales licence is not to be granted (or subject to a similar action).”
Crown has been facing stringent regulatory scrutiny in Australia. In February, the firm was found unsuitable to operate a new Sydney casino at Barangaroo, in New South Wales. The regulator there suggested a number of recommendations be adopted by the firm in order to be considered fit to be granted a gaming licence.
The casino operator is also facing regulatory scrutiny in the Australian states of Victoria, where it operates Crown Melbourne, and in Western Australian, where it runs Crown Perth (pictured), over the firm’s suitability to hold its casino licences in those states.
The new conditions also state that the proposal would not move forward if any of the threegaming regulatory authorities in Australia “imposes (or stating or indicating that they intend to impose) terms or conditions on Crown or any of its current or foreshadowed casino licences or framework agreements which, when combined, constitute a material adverse change.”
In Tuesday’s filing, Crown said its board “is continuing its assessment” of the proposal, “having regard to the value and terms of the proposal and other considerations.” The casino firm added that Blackstone had also indicated that its proposal was “not conditional on arranging debt financing.”
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