Blackstone Group has tabled a $6bn takeover proposal for beleaguered Australian casino operator Crown Resorts, as regulators in the firm’s home country continue investigations into its suitability to hold casino licenses.
The US investment management firm, and affiliates, have offered AU$11.85 cash per share, which represents a premium of 19 per cent to the volume-weighted average price of Crown shares since the release of its H1 FY21 results.
The proposal is conditional upon a number of conditions, including execution of a binding ‘Implementation Agreement’ incorporating various terms and conditions, such as the company receiving regulatory confirmation that a Blackstone-owned Crown is considered a suitable person to continue to own and operate the Sydney, Melbourne & Perth licences, and other gaming-related approvals as required.
Further conditions include, due diligence; arranging debt finance; a unanimous Crown Board recommendation and a commitment from all directors to vote in favour of the proposal; and approval from Blackstone investment committees.
Blackstone currently owns a 9.99 per cent shareholding in Melbourne headquartered company, having acquired the stake from Melco Resorts and Entertainment for $8.15 per cent in April 2020.
The Crown board says that it is yet to firm a view on the merits of the proposal, and will now commence a process to assess the takeover offer with regards to its value, terms and other considerations.
Furthermore, it will also engage with relevant stakeholders including regulatory authorities, with the company updating that shareholders do not need to take any action at this stage and adding that “there is no certainty that the proposal will result in a transaction”.
Earlier this month, Western Australia officially confirmed that a Royal Commission would be held to determine the suitability of Crown Perth to continue holding a casino gaming licence, after a New South Wales inquiry found that the company isn’t fit to operate the $2.2bn Crown Sydney Hotel Resort.
Spearheaded by former supreme Court judge Patricia Bergin, the inquiry highlighted “very serious problems” in Crown’s operations, citing poor corporate governance, deficient risk-management structures and processes, and a poor corporate culture.
The Royal Commission is expected to deliver an interim report in relation to the regulatory framework by June 30, 2021 and a final report with findings and recommendations by November 14, 2021.
