Blackstone Offers $5.5bn In Third Bid To Buy Out Crown Resorts

November 19, 2021
Back
Financial services heavyweight The Blackstone Group has launched a third attempt to acquire struggling Australian casino operator Crown Resorts.

Body

Financial services heavyweight The Blackstone Group has launched a third attempt to acquire struggling Australian casino operator Crown Resorts.

In this latest bid, Blackstone has lifted its offer per share by A$0.15 ($0.11) from its rejected bid in May.

New York-based Blackstone submitted an unsolicited third bid of A$7.62bn ($5.55bn), or A$12.50 per share, for the just over 90 percent of Crown’s shares that it does not already own, according to a Crown statement released on Friday.

Investors once again welcomed the Blackstone offer, pushing Crown shares up 16.6 percent to A$11.54 at the close of trading on the Australian Securities Exchange.

Crown said its board, which is unrecognisable from a year ago after a raft of resignations, is yet to take a view on the latest offer.

Blackstone’s bid is also the first to emerge since late October, when the Victoria state Royal Commission released its report into misconduct at Crown Melbourne.

That report amounted to a stay of execution for the casino operator.

Although fiercely critical of Crown’s “disgraceful” failures over its anti-money laundering, responsible gambling, staff protection and other responsibilities, commissioner Ray Finkelstein recommended a two-year probation with government board oversight rather than licence cancellation.

Victoria’s parliament is in the process of legislating Finkelstein’s recommended tougher licensing conditions for Crown, as well as rebooting a regulator dedicated to casino operations.

Crown’s statement on Friday noted that Blackstone will proceed with the takeover offer even if a similar Royal Commission in Western Australia state has not concluded or if transactions regulator AUSTRAC continues its own probe into Crown.

This suggests the US giant does not anticipate a further worsening of Crown’s compliance status with state and national authorities after years of heavy reputational damage to the company and most of its former leadership, including leading shareholder James Packer.

However, as with its previous offers, the Blackstone takeover will be conditional on Crown retaining favour with regulators in Victoria and Western Australia, as well as restoring permission to operate the Crown Sydney casino from the regulator in New South Wales state.

Blackstone first offered to buy out Crown for A$11.85 per share in March and then for A$12.35 in May. The Crown board rejected both offers for undervaluing the company.

Crown rival The Star Entertainment Group, which withdrew its own Crown takeover bid in July over uncertainty surrounding Victoria’s Royal Commission into the company, is itself facing elevated scrutiny in relation to allegations of compliance failures akin to Crown’s.

Our premium content is available to users of our services.

To view articles, please Log-in to your account, or sign up today for full access:

Opt in to hear about webinars, events, industry and product news

To find out more about Vixio, contact us today
No items found.