Oaktree Throws Hat Into Ring Offering To Purchase James Packer’s Crown Stake

Oaktree Investment Firm has thrown its hat into the ring, inquiring about the possibility of buying James Packer’s stake in Crown Resorts, giving the Australian casino operator another option as it seeks to acquire its Sydney gaming licence.

Crown announced it had received a ‘non-binding and indicative’ proposal from Oaktree Investments to finance the billionaire’s private company Consolidated Press Holdings’ buyback of shares.

Crown said in a statement to G3Newswire: “Crown Resorts Limited has received an unsolicited, preliminary, non-binding and indicative proposal from a company on behalf of funds managed and advised by Oaktree Capital Management, to provide a funding commitment of up to A$3.0bn to Crown via a structured instrument with the proceeds to be used by Crown to buy-back some or all of the Crown shares which are held by Consolidated Press Holdings on a selective basis.”

Any buyback of Crown shares owned by CPH will need to be approved by Crown shareholders (with no votes being cast in favour of the resolution by CPH or its associates).

No current view on proposal

The firm added: “The Crown Board has not yet formed a view on the merits of the Oaktree Proposal.

“It will now commence a process to assess the Oaktree Proposal. Crown shareholders do not need to take any action in relation to the Oaktree Proposal at this stage. There is no certainty that the Oaktree Proposal will result in a transaction.” 

Mr Packer was not a suitable individual to be involved with the casino, according to an inquiry into the NSW Independent Liquor and Gaming Authority, and his influence would prevent Crown from being allowed to open the casino at its $2.2 billion Barangaroo location.

According to Reuters, Nathan Bell, portfolio manager of Intelligent Investor, a Crown shareholder, said there was “no reason Crown couldn’t copy the [Blackstone] approach and do it themselves.”

White Funds Management’s managing director, Angus Gluskie, who also holds Crown securities, added: “There is obviously a reason Oaktree doesn’t want some element of the business or wants to receive some uplift in the return that accrues to them, above and beyond the return of a normal shareholder.”

Crown is currently the target of a $6 billion acquisition bid by Blackstone Group and affiliates, with the US investment equity firm and affiliates submitting a plan to purchase stock in the company that it does not already own at AU11.85 each.