Following its last two offerings, Blackstone updated its takeover proposition, offering Crown AU$8.46 billion. Crown Resorts rejected the offer but agreed to grant access to its accounts, hoping the US company will raise its bid.
In a statement from Thursday morning, the casino company explained the reason behind the rejection of the latest offering. According to Crown Resort, the last bid of Blackstone amounted to AU$12.50 per share, which is not a value that Crown’s shareholders find suitable enough.
Blackstone is Granted Access to Crown Resorts’ Books Despite Having Its Offer Rejected
The last bid made by Blackstone is its third offering so far, with the private company making its first proposition of AU$11.85 per share back in March and then raising the offer to AU$12.35 in May. Both of the offers were declined, with Crown insisting on the value of the two bids being too low. While Blackstone’s third attempt to win over Crown was also rejected, the casino giant decided to grant the private company access to non-public information.
According to Crown, opening its books to Blackstone will give the company an opportunity to go through additional due diligence inquiries. This will allow them to make a new proposal, with a bid that will truly reflect Crown’s worth. While the third offer of the US company reached AU$12.50 per share, the casino giant still considered the bid as not substantial enough. Meanwhile, just before Blackstone’s most recent offer, Crown’s shares were trading just a little below AU$10 per share. In comparison, at the end of the trading session of Thursday, the company’s shares closed at AU$11.02.
Crown Goes Through Rigorous Investigations but That Does Not Discourage Suitors
For over a year, Crown has been put through a series of stringent investigations carried out by regulatory bodies. Despite that, the number of companies that show interest in acquiring Crown’s assets has not declined. In addition to Blackstone which has already made three different proposals in the last few months, Star Entertainment Group Ltd. has also been courting Crown and made an acquisition proposal. Blackstone’s rival is a prominent casino operator in Australia eyeing to acquire Crown’s assets as it still holds a monopoly over casinos in two cities in Australia and a brand new resort in Sydney.
Despite Star Entertainment Group’s interest, however, the operator withdrew their offer after Crown’s operational license in Melbourne could have been revoked. Following a Victoria royal commission’s investigation, Crown was deemed unfit to operate a casino due to its failings. Despite that, the company’s license was not cancelled as it was considered that such actions would have a devastating effect on Victoria’s economy. What is more, revoking Crown’s operational license would cost the jobs of 11,500 employees of Crown Melbourne.
- Author
Olivia Cole
