Blackstone Revises Its Crown Takeover Proposal
A private equity group interested in acquiring Crown Resorts has made a fresh bid for the embattled casino operator.
The Australian Financial Review reports that Blackstone has returned to Crown with a revised proposal, following its $11.85 a share indicative offer, which was made six weeks ago.
The new proposal, sent to Crown’s board last weekend, saw Blackstone drop a handful of conditions and commit to be ready to acquire Crown in the third quarter of this year.
Conditions dropped included the financial condition, sources said.
It is understood Blackstone said it could have its bid fully formed and ready to be implemented in the third quarter of this year, which is when it expects to receive probity clearances from Australian states, including NSW and Victoria.
The revised proposal, sent to Crown executive Helen Coonan and her bankers at UBS, appears to be another attempt by Blackstone to get the casino company to engage on its offer and set out to convince both Crown and its shareholders of its expertise in the gaming sector.
Since Morgan Stanley-advised Blackstone lobbed the bid in the second half of March, Crown has said nothing except that it is considering the proposal.
It is understood that Crown and its advisers have ever been reluctant to engage in confidential talks with Blackstone.
Blackstone has since refined regulatory conditions attached to its bid, effectively offering to take on more of the regulatory risk associated with Crown in a handful of jurisdictions, and has now lobbed a revised proposal.
Crown shares last traded at $12.12.
Also, since Blackstone lobbed its offer, rival US alternatives investment giant Oaktree Capital Management has put forward a funding proposal that would see Crown buy back major shareholder James Packer’s stake in the company.
Oaktree bids for Crown
In mid-April, investment company Oaktree proposed to takeover Crown, with details of an investment funding of nearly $3 billion to Crown in order to buy back “some or all” of the shares held by CPH.
Oaktree would “provide a funding commitment of up to A$3 billion 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 CPH on a selective basis.”
CPH holds a shared ownership in Crown of about 37 per cent, making Mr. Packer the largest investor in the nation’s largest gaming group.
Mr. Packer’s influence over the Crown board as a majority shareholder has been scrutinized by a NSW probe into the casino that determined the company was not suitable to hold a gaming licence in the state because of evidence of mismanagement and money laundering.
Findings from the NSW Independent Liquor and Gaming Authority inquiry also found Mr Packer was not a suitable person to be associated with the casino.
Commissioner Patricia Bergin SC said Mr. Packer’s influence would hinder the company’s ability to gain approval to open the gaming floor of its $2.2 billion Barangaroo casino in Sydney.
Crown said the board was yet to form a view on Oaktree’s proposal but was assessing the potential deal.
A buyback would need to be approved by Crown shareholders.
As Crown Resorts received its first takeover offer from private equity firm Blackstone, it was reported that any takeover bid faces numerous hurdles, including negotiating a fair sale price.
Crown said its board had not yet formed a view on the merits of Blackstone’s proposal and would start a process to assess it.
A proposed takeover bid faces numerous hurdles and regulatory risks, including several inquiries into Crown by state-based regulators, looming class actions and financial regulator AUSTRAC investigating Crown for potential breaches of Australia’s anti-money laundering and counter-terrorism financing laws.
