Crown backs Blackstone bid valuing casino biz at US$6.4bln
The board of Australian casino operator Crown Resorts Ltd has unanimously backed an offer stemming from investment firm Blackstone Inc to acquire all the shares of Crown Resorts in a deal that values the gaming firm at AUD8.9 billion (US$6.36 billion).
A Monday filing said the backing from the board was “in the absence of a superior proposal”.
Just before Monday morning’s announcement, Crown Resorts’ shares had been “temporarily paused” on the Australian Securities Exchange.
Under the proposed deal, Crown Resorts stockholders will be entitled to AUD13.10 in cash per share.
The casino group – formerly a partner of the Melco brand in the Macau casino market – said the offer represented a premium of circa 32 percent to the closing price of its shares on November 18 when they stood at AUD9.90 apiece. That date was the last trading day prior to Blackstone making an offer of AUD12.50 in cash per share.
The AUD13.10 offer now on the table for Crown Resorts’ shareholders represents the fourth time in 12 months that Blackstone has made a play for Crown Resorts. The suitor offered AUD11.85 per share in March last year, and AUD12.35 per share in May.
The latest proposal represents an increase in equity value of more than AUD845 million to the price of AUD11.85 cash per share initially offered by Blackstone in March 2021.
Subject to regulatory approvals, a shareholder meeting to vote on the Blackstone proposal is likely in the second quarter. The meeting is tentatively scheduled for April 29, said the target in the Monday filing.
The Crown Resorts board and management had “made good progress in addressing a number of significant challenges and issues emerging from the Covid-19 pandemic and various regulatory processes,” the casino group’s chairman, Ziggy Switkowski, was cited as saying in the announcement.
He added however, that “uncertainty remains” regarding the outlook for Crown Resorts, “and having regard to those circumstances and the underlying value of Crown we believe the Blackstone transaction represents an attractive outcome for shareholders.”
Any deal would be subject to Blackstone “receiving final approval” from the respective casino regulators in the Australian states of Victoria, New South Wales, and Western Australia, where Crown Resorts has operations.
In February last year, a casino licence was initially withheld from Crown Resorts by the New South Wales regulator following an inquiry into how the casino group ran its existing Australian business. The permit topic related to the firm’s new Crown Sydney venue in the Barangaroo district of Sydney.
But in December, in an investor presentation, Crown Resorts said it hoped to launch gaming operations at Crown Sydney in early 2022.
In October, a public inquiry in Victoria found Crown Resorts “unsuitable” as a gaming licensee in that state, but allowed the group to keep its licence, subject to stricter oversight.
Rival Australian casino firm The Star Entertainment Group Ltd proposed in May a merger between it and Crown Resorts, that valued the target’s shares at more than AUD14.00 apiece.
But in July – amid public inquiries into Crown Resorts’ respective Melbourne and Perth casino licences – that suitor withdrew its offer.
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