Crown to recommend binding offer at A$13.10 a share to end litany of troubles
U.S. private equity firm Blackstone Inc., about to move into the Australian casinos industry as it moved closer to end the Crown Resorts Limited troubles with an increased bid of A$13.10 per share, up from a November offer of A$12.50, taking the total value of Crown Resort to A$8.9 billion (US$6.5 billion).
The Melbourne-based casino company said in a statement, yesterday Thursday 13, that it will, “engage with Blackstone, and will recommend shareholders accept the bid if a binding offer of at least A$13.10 a share is made.”
The deal would end Crown’s recent troubles, after it was found unsuitable to run its Sydney casino, plus a series of wrongdoing at its Melbourne casino, including facilitating money laundering and underpaying taxes.
The biggest prize for Blackstone, if the regulators and government allow, as well as the casino monopolies commission is the prospect of building an A$2.2 billion resort on Sydney’s waterfront.
Steve Johnson, chief investment officer at Sydney’s Forager Funds Management, said: “Crown remains a high-quality and valuable asset and is worth more to private equity than it is ever going to be worth listed. The increase in offer price is a welcome step and we are supportive of the board continuing a push for an appropriate firm offer.”
Crown’s gambling operations began to unravel with a crackdown by authorities in mainland China in late 2016, leading to the arrest and conviction of more than a dozen employees. By the end of that year, Crown had scrapped a spinoff of its international assets, including a stake in Macau casino operator Melco Resorts & Entertainment Ltd., and started a retreat to Australia.
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 too low. In July, rival Australian casino operator Star Entertainment Group Ltd. scrapped a merger proposal with Crown, and other deals simply did not materialize.
