Operator News
Australia – Blackstone on track to take control of Crown Resorts
By Lewis - 13 January 2022
The board of Australia’s biggest casino operator, Crown Resorts, said today that it’s likely to back a buyout proposal from US private equity firm, Blackstone, after the offer was sweetened to A$8.87bn ($6.46bn). The buyout firm, which already owns 10 per cent of Crown, lifted its bid to A$13.10 per share, from a November offer of A$12.50, and is likely to be accepted unless a higher offer emerges.
Crown has said it will now engage with Blackstone after describing its previous bid as “uncompelling” and will recommend to shareholders that the bid be accepted. The deal comes after Crown was found to be unsuitable to operate its Sydney casino and given two years to address a catalogue of issues related to its Melbourne casino, including tax and anti-money laundering problems.
The revised offer puts Blackstone as the front-runner to win control of Crown and there are signs that the deal might be struck by the end of January. An agreement to sell to Blackstone would also offer Crown’s biggest shareholder, James Packer, an exit from the company in which he owns around 36 per cent of shares, but who has retreated from corporate life in recent years to deal with mental health issues.
The deal requires approval from casino regulators in three Australian states and a shareholder vote, but could be completed by the end of June.
Crown shares rose nine per cent on the news of the revised Blackstone offer to A$12.68, their highest price since June 4, but still below Blackstone’s offer indicating market doubt about a rival bid. Blackstone made its first approach for Crown in March last year, with an initial offer of A$11.85. That and a subsequent offer in May were rejected as two low. In July, rival Australian casino operator Star Entertainment Group scrapped a merger proposal with Crown, while an offer from Oaktree Capital Management LP to fund the buyout of Packer’s stake also didn’t make the grade.
