Crown Receives Takeover Offer From Blackstone

Crown Resorts

Embattled casino operator Crown Resorts said it has received an unsolicited, non-binding and indicative takeover proposal from one of its major shareholders.

The Australian reports that US private equity giant Blackstone Group’s offer is worth $11.85 cash per share, a premium of 19 per cent to the average price of Crown shares since the release of its first-half results.

The offer, which is conditional on regulatory confirmation that a Blackstone-owned Crown is considered suitable to own and operate the Sydney, Melbourne and Perth casino licences, values the embattled casino giant at $8.02 billion.

Crown’s consideration of the officer comes as chairman Helen Coonan is deep in the middle of a major rehabilitation of the company following the damning findings of the Bergin inquiry into Crown by the NSW Liquor and Gaming Authority.

A royal commission into Crown called by the Victorian government and led by former judge Ray Finkelstein is scheduled to begin this week.

The West Australian government is also poised to commence its own royal commission investigation into Crown in the wake of the Bergin findings.

James Packer has indicated he is a willing seller of his stake in Crown after offloading part of his stake to Melco Resorts in 2020 and negotiating with US casino giant Wynn Resorts in 2019 for a potential takeover of the company.

That offer was rebuffed by the Crown board.

However, the billionaire is unlikely to accept an opportunistic offer for his shares ahead of the inquiries in Victoria and WA running their course.

Blackstone made its investment in Crown at the end of April 2020 when it seized a 10 per cent stake from Hong Kong billionaire Lawrence Ho’s Melco Resorts.

At the time it declared its desire to be a helpful and constructive shareholder of Crown after being welcomed to the share register of the gaming group by James Packer.

Mr Packer at the time spoke to Blackstone’s president and chief operating officer Jonathan Gray.

The Crown investment was made by a Blackstone entity known as Midnight Acacia Holdings and is now housed in one of Blackstone’s real estate funds.

Blackstone was one of several parties that held talks with Mr Packer’s private company Consolidated Press Holdings in 2015 about partnering in potential privatisation of the entity.

It follows growing talk that Blackstone, a 10 per cent shareholder in Crown, has applied to the NSW gaming regulator for probity approval to increase its stake.

Crown board to assess Blackstone’s offer

blackstone logo
Crown said on Monday its board has yet to form a view on the merits of the takeover proposal, but will now assess it.

“Crown shareholders do not need to take any action in relation to the proposal at this stage,” it told the ASX.

“There is no certainty that the proposal will result in a transaction.”

Crown has appointed UBS as financial adviser and Allens as legal adviser in relation to the proposal.

As well as regulatory clearance, Crown says Blackstone’s offer is conditional on receiving due diligence, arranging debt finance and unanimous support from Crown directors.

Blackstone’s appearance on Crown’s shareholder register last year increased speculation that it may consider a demerger of the casino giant’s valuable property assets.

In June 2016, Crown outlined plans to split itself up by creating a separate listed entity to hold its international operations, including its 27 per cent stake in casino business Melco Crown, which operates in the struggling Macau market.

It also flagged creating a listed property trust that would own Crown’s Australian hotels, excluding its Melbourne flagship Crown Towers.

Crown ditched those plans in December 2016 and trimmed its multi-billion-dollar holding in Melco Crown.

William Brown

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