Blackstone Puts Out $6b Crown Resorts Takeover Bid

As authorities in the firm’s home country continue to investigate its suitability to retain casino licences, Blackstone Group has put out a $6 billion takeover bid for beleaguered Australian casino company Crown Resorts.

The US investment management firm and its associates have bid AU$11.85 cash per share, reflecting a 19 percentage premium over the volume-weighted average price of Crown stock since the company’s H1 FY21 results were announced.

The application is subject to a variety of conditions, including the corporation seeking regulatory assurance that a Blackstone-owned Crown is an appropriate individual to continue to hold and manage the Sydney, Melbourne, and Perth licences, as well as other gaming-related permits as required.

Due diligence; debt financing; a unanimous Crown Board decision and a pledge from all directors to vote in favour of the proposal; and support from Blackstone acquisition committees are among the other provisions.

Blackstone currently holds a 9.99 percent interest in the Melbourne-based group, which it purchased for $8.15 percent from Melco Resorts and Entertainment in April 2020.

Yet to develop an opinion on the merits of the bid

The Crown board says it has yet to develop an opinion on the merits of the bid and will now initiate a review to determine the takeover offer’s worth, terms, and other factors.

It will also consult with relevant parties, such as regulatory bodies, with the company notifying shareholders that they do not need to take any action at this time and that “there is no certainty that the proposal will result in a transaction.”

After a New South Wales investigation determined that Crown Perth is unfit to run the $2.2 billion Crown Sydney Hotel Resort, Western Australia announced earlier this month that a Royal Commission will be convened to decide its suitability to continue keeping a casino gaming licence.

The investigation, led by retired Supreme Court judge Patricia Bergin, found “very serious problems” in Crown’s activities, citing weak corporate governance, risk-management systems and procedures, and a poor corporate culture as examples.

By June 30, 2021, the Royal Commission is scheduled to deliver a preliminary report on the regulatory system, and by November 14, 2021, a full report containing conclusions and recommendations.