Crown Resorts Rejects Blackstone Group Acquisition Offer
Crown Resorts has had a rough few years as the Australian casino operator ran into trouble with gaming regulators at home and overseas. However, things have improved for the controversial gaming operator in the last few weeks as things have cooled down on the regulatory front with the New South Wales (NSW) gaming regulator indicating that it will soon grant Crown a gaming license to open its casino floor at it’s A$2.2 billion Barangaroo casino resort.
Blackstone Offer Gets Rejected
Crown had also received a non-binding acquisition proposal from U.S. investment giant the Blackstone Group. The first time the proposal came in; Crown Resorts made no official comment and stayed silent. A few weeks later, the Blackstone Group sent in a revised proposal and upped the offer to acquire Crown Resorts.
Blackstone was willing to pay out $12.35 per share which would result in an $8.4 billion takeover. With the second acquisition proposal, came a string of conditions that Crown needed to meet for the acquisition to go through. One of those conditions was that Crown Resorts must get a clean chit from all state gaming regulators where the operator was and is being investigated.
Crown Resorts also stayed silent on the second proposal and told shareholders that they would discuss the proposal internally. While Crown was holding discussions, Star Entertainment which is main rival in the Australian market, submitted an acquisition proposal that showed it was willing to pay a higher rate than the Blackstone Group.
Crown confirmed on May 17 that after discussions with its board, they decided to turn down the offer from Blackstone as they felt it undervalued the company and what it could achieve in the long run, given the fact that they are yet to open the Barangaroo casino floor and expect to bring in significant revenues from the sale of their luxury apartments at Crown Sydney.
There is no indication from the Blackstone Group as of now, whether they will reconsider and send in a third proposal or if they will drop the idea of going after Crown Resorts.
Star Entertainment Requested To Send More Info
Crown Resorts has not turned down the acquisition proposal from Star Entertainment. Reports suggest that Crown has asked Star Entertainment to provide more information on the proposed merger. Star Entertainment is willing to pay close to $14 per share to acquire Crown and create a $12 billion gaming giant that will dominate the APAC market.
Even if the two companies decide to merge, they will need to get the approval of the Australian Competition & Consumer Commission.