Oaktree Bids to Buy Packer’s Crown Shares

signing a contract
James Packer’s majority stake in Crown Resorts could be purchased by an investment firm if it has its way.

News.com.au reports that Oaktree Investments has given a non-binding and indicative proposal to Crown Resorts to buy back shares owned by the billionaire’s private company Consolidated Press Holdings.

Oaktree’s proposed details 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 scrutinised by an 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 BerginSC 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.

Blackstone tweaks its Crown takeover proposal

blackstone logo
Australian casino operator Crown Resorts said private equity giant and 10 per cent shareholder Blackstone Group has modified the conditions of its proposed $8 billion buyout.

Mingtiandi reported that Crown has already been found unfit to hold a gambling licence for its Sydney casino due to alleged links to organised crime and faces royal commission’s in Victoria and Western Australia, the two other states where it operates.

In March, US buyout specialist Blackstone offered to buy Crown shares it doesn’t already own for A$11.85 each.

The modified conditions Blackstone has attached to its Crown proposal safeguard Blackstone against an adverse recommendation in the current royal commission’s, such as the cancellation or suspension of Crown’s WA or Victorian licences before the deal is approved by the court.

A statement from Crown added that Blackstone expected to receive approvals to buy Crown from each state regulator by the third quarter of 2021, without specifying when during the July to September quarter it expected the result.

The Victorian and WA inquiries are due to deliver their recommendations in August and November, respectively.

Crown also clarified that Blackstone’s bid was not conditional on arranging financing for the deal.

A Blackstone representative declined to comment.

Crown added its board of directors was still assessing the proposal.

Crown found James Packer, who stands to receive about A$2.9 billion from the deal by selling his nearly 37 per cent stake, said he was open to the proposal.

Blackstone’s offer for Crown faces a number of hurdles

As Crown Resorts received its first takeover offer from private equity firm Blackstone, the ABC reported in early April 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.

William Brown

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