Crown Resorts Welcomes Blackstone's Boosted Takeover Offer

January 13, 2022
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Crown Resorts’ ownership limbo has taken a major step toward resolution with its board unanimously backing a fourth Blackstone Group offer to buy out the company.

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Crown Resorts’ ownership limbo has taken a major step toward resolution with its board unanimously backing a fourth Blackstone Group offer to buy out the company.

New York-based financial services heavyweight Blackstone has raised its cash takeover offer to A$13.10 ($9.54) per share, a A$0.60 increase from its third offer in November, with all other prospective arrangements unchanged.

However, the Crown board has left the door open for potential rival bidders such as The Star Entertainment Group to up the price before a deal is reached, effectively putting the company to auction with A$8.9bn ($6.5bn) as the reserve price.

If Blackstone maintains its A$13.10 valuation, the board has a “current unanimous intention to recommend that shareholders vote in favour of the proposal in the absence of a superior proposal” and subject to independent review of the proposal’s benefit to shareholders, Crown said in a statement on Thursday.

“The Crown Board is focused on maximising value for Crown shareholders and will carefully consider any proposal that is consistent with this objective.”

The statement said Blackstone submitted its latest offer in view of “non-public information provided by Crown during initial due diligence”.

Delighted Crown investors pushed company shares on the Australian Securities Exchange up 8.8 percent to A$12.65 on Thursday in response to the latest offer.

Acceptance of the Blackstone offer is also predicated on approval from three state government regulators.

Ordinarily a technicality, the stances of the New South Wales, Victoria and Western Australia state regulators on Blackstone’s offer are critical because of ongoing recalibration of gambling regulation in the wake of withering inquiries into Crown misconduct.

The New South Wales Bergin Inquiry into Crown’s suitability to operate the Crown Sydney casino and Victoria’s Royal Commission into Crown Melbourne each uncovered evidence that devastated the former board’s credibility.

The government probes also ended controlling shareholder James Packer’s influence over the board, although not his key role in disposal of the company.

Western Australia’s Royal Commission into Crown Perth is due to deliver its own report by March 4.

Blackstone’s commitment to acquiring Crown has endured despite the Victorian government placing the company on probation for two years and appointing a special manager with powers to veto board decisions, among other tough licensing conditions.

Blackstone initially offered A$11.85 per share in March 2021 to take over Crown, followed by a $12.35 offer in May. The Crown board rejected these and the November offer for undervaluing the company.

Blackstone currently holds 10 percent of Crown stock.

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