Crown Resorts confirmed it had received an “unsolicited, non-binding and indicative proposal from a company on behalf of funds managed and advised by The Blackstone Group Inc. and its affiliates, to acquire all of the shares in Crown by way of a scheme of arrangement at an indicative price of A$11.85 cash per share.”
“The Crown Board has not yet formed a view on the merits of the proposal. It will now commence a process to assess the proposal, having regard to the value and terms of the Proposal and other considerations. It will also engage with relevant stakeholders including regulatory authorities. Crown shareholders do not need to take any action in relation to the Proposal at this stage. There is no certainty that the proposal will result in a transaction,” the company also said in its statement.
Crown has appointed UBS as financial adviser and Allens as legal adviser in relation to the proposal.
The indicative price of $11.85 cash per share represents a premium of 19% to the volume-weighted average price of Crown shares since the release of its 1H FY21 results. The proposal is subject to a number of conditions, including due diligence; arranging debt finance; a unanimous Crown Board recommendation and a commitment from all Crown Directors to vote in favour of it.
There will also be a condition that Blackstone receives regulatory confirmation that a Blackstone-owned Crown is considered a suitable person to continue to own and operate the Sydney, Melbourne and Perth licences and other gaming-related approvals as required; and approval from Blackstone investment committees.
Nathan Bell, portfolio manager of Intelligent Investor, which has Crown shares, said of the offer: “Blackstone couldn’t get away with a price like this if the casinos weren’t being affected by COVID and the management issues at the same time. It’s only an opening bid. It’s a messy situation and offering to acquire a casino is a complex affair at the best of times due to all the regulation.”
James Packer, who’s father Kerry founded the business is still the biggest shareholder in Crown with a 36%. He would get roughly A$2.9bn from the deal.
Blackstone has acquired the Bellagio in Las Vegas for US$4.25 billion, and also owns a casino resort called “The Cosmopolitan” in Las Vegas and Spanish gaming hall operator Cirsa.
Source: GMB
