Shares Soar for Crown Resorts as Blackstone Rebounds With Sweetened AU$8.5bn Bid

Shares Soar for Crown Resorts as Blackstone Rebounds With Sweetened AU$8.5bn Bid

Shares Soar for Crown Resorts as Blackstone Rebounds With Sweetened AU$8.5bn Bid

Battle for handle resumed

US private equity giant Blackstone Inc., has resumed its battle for control of Australia’s Crown Resorts with a fresh AU$eight.5bn (US$6.2bn) bid.

Australian online broker CommSec took to Twitter on Friday with news that the sweetened bid has sent beleaguered Crown’s stock soaring:

Blackstone’s most current offer of AU$12.50 (US$9.10) per share represents its third bid for Crown following other attempts in March and May possibly. According to Reuters, the fresh offer’s value is 26% higher than the Thursday closing value for Crown shares.

The offer has many circumstances attached, including unanimous backing from the Crown board. Crown responded to the bid saying its possible takeover by Blackstone would be conditional on the bidder getting final approval from casino regulators in Victoria, New South Wales (NSW), and Western Australia (WA).

Multiple hurdles await

According to InQueensland, Blackstone has already engaged with the regulators, who gave the US firm no reason to think that it would not obtain approval. As such, Blackstone confirmed it is prepared to go ahead with the proposed transaction, if and when regulators give their ultimate confirmation of suitability.

Australian councilor and journalist Stephen Mayne, even so, took to Twitter to express his skepticism that governments in Victoria, NSW, and WA would give their nod to Blackstone owning one hundred% of Crown:

Obtaining the regional governments on board in the three Australian states could prove a difficult challenge for Blackstone. An NSW inquiry in February identified Crown unsuitable to hold a Sydney casino license. Meanwhile, in WA there’s an ongoing royal commission’s report into Crown Perth to contemplate, added to rulings in Victoria on the back of one more royal commission investigation.

Belief in reform

Blackstone, nevertheless, already has a 9.9% stake in Crown that it bought from Melco Resorts in April for AU$eight.15 (US$five.92) per share. The revitalized bid reflects Blackstone’s belief it can rehabilitate the scandal-ridden Crown, which became a more appealing bet final month following the outfit retaining its prized Melbourne casino license.

Crown Resorts operates 3 casinos in Perth, Sydney, and Melbourne. In “an unprecedented step in Australian corporate oversight,” the state government in Victoria permitted Crown Melbourne to preserve its license, albeit below strict government supervision for two years.

Following Blackstone’s latest bid, Crown said its board has not however formed an opinion on the merits of the takeover. “It will now assess the proposal getting regard to the worth and terms of the proposal and other considerations,” the casino operator confirmed in a Friday statement.