Blackstone Inc got one step closer to being successful in its pursuit of the Australian gambling giant Crown Resorts. The US private equity firm, which already holds a 9.9% stake in Crown Resorts once again boosted its takeover offer for the gambling company to AU$13.10 per share, with the overall offer estimated at AU$8.9 billion. Its previous offer, which was made in November 2021, has valued the troubled Australian gambling operator at AU$12.50 a share.
Earlier today, Crown Resorts announced that its board is now likely to vote in favour of the improved buyout offer unless a higher bid emerged. This has been the fourth non-binding offer received by the Australian gambling giant, which has previously rejected the AU$12.50-a-share offer of Blackstone as not “compelling”.
Blackstone first approached the gambling company with an acquisition offer in March 2021. At the time, the takeover bid was worth AU$11.85 a share but was rejected as too low. The US private equity firm renewed its takeover offer in May, but it was also turned down.
The revised acquisition bid has now made Blackstone the frontrunner for winning control over the assets of Crown Resorts that has recently faced complex misconduct investigations in every state it operates in. furthermore, the casino operator has been suffering from the lengthy Covid-19 social isolation and lockdown measures in the country, as they have caused a significant decline in the number of visitors to the company’s gambling and entertainment venues.
According to information provided to Reuters by a person with direct knowledge of the situation, the takeover price increase was backed by some key Crown Resorts’ investors who collectively hold approximately 60% of the Australian casino giant’s stock, including the gambling company’s billionaire founder James Packer. The person, who asked not to be named because he was not allowed to comment publicly on the matter, further revealed there are hopes that a deal between Blackstone and Crown Resorts will be signed by the end of January 2022.
Acquisition and Reform of Crown Resorts Could End a Turbulent Chapter for the Australian Gambling Giant
The chief investment officer at Forager Funds Management in Sydney, Steve Johnson, believes that despite all the troubles faced over the last year and so, Crown Resorts is still a valuable and high-quality asset and is worth more to private equity than it would ever be worth listed.
According to experts, if the proposed buyout deal is accepted by Crown Resorts and the two companies complete it, that would close a quite turbulent chapter in the history of the Australian gambling company that has been dealing with the consequences of its tarnished reputation. As Casino Guardian previously reported, the casino operator was found unfit to run its new Barangaroo casino in Sydney. It was also provided with a 2-year grace period to address the findings of tax underpayment and facilitation of money laundering at its flagship casino in Melbourne and make them right.
Some market analysts have noted that if Blackstone manages to close the deal and take over Crown Resorts, it should make an effort to reform the Australian gambling giant, which is likely to calm down local regulatory bodies a bit. In return, the US private equity firm would get casino monopolies in two big Australian cities, as well as a new luxury gambling and entertainment resort on Sydney’s waterfront area.
On the other hand, if the two parties reach an agreement, the sale of the casino company would guarantee James Packer a clean exit from Crown Resorts, which he created and grew to a point when his name became a synonym of the operator. Currently, Mr Packer holds about 36% in Crown Resorts. In the last few years, he has largely withdrawn from corporate life due to personal issues.
The billionaire investor’s company that holds the aforementioned stake in the gambling operator, Consolidated Press Holdings (CPH), has shared that it would review all documents associated with the proposed takeover deal before making a decision on the matter. The third-largest shareholder of Crown Resorts, Perpetual, which holds a 9.2% stake in the company, said it supported the improved acquisition offer in the absence of a higher one. Blackstone, which holds 9.9% in Crown Resorts, has not commented so far.
- Author
Olivia Cole
