American global asset management firm Oaktree Capital Management LP has modified its proposal to acquire the 37% stake in Crown Resorts currently held by James Packer’s Consolidated Press Holdings Pty Limited (CPH).
According to a statement issued by Crown early Tuesday, the revised offer outlines an AU$3.1 billion facility consisting of two tranches: an AU$2 billion private term loan and an AU$1.1 billion loan convertible into new shares to be issued by Crown.
The previous proposal had provided an AU$3 billion funding commitment via a structured instrument with the proceeds to be used by Crown to buy-back some or all of the Crown shares held by CPH.
Under new terms outlined by Oaktree, the facility – with a term of seven years – would beused to fund a selective buy-back of CPH’s shareholding in Crown.
The Convertible Component of the facility would give Oaktree the ability to convert the AU$1.1 billion tranche into new shares in Crown at a strike price of $13.00 in specified circumstances, including at any time after the first anniversary of the facility, provided that the Crown share price is above AU$13.00, Crown explained.
The number of new Crown shares which would be issued to Oaktree upon conversion of the Convertible Component would be capped such that Oaktree would hold 9.99% of the total number of Crown shares on issue. The remaining part of the Convertible Component would be cash settled by Crown.
Crown said it has yet to form any view on the merits of the proposal.
The significant role played by CPH in the day-to-day operations of Crown and its Board of Directors was one of the key takeaways of an inquiry held late last year which ultimately found Crown unsuitable to hold a NSW casino license.
CPH has since reached an agreement with the NSW Independent Liquor & Gaming Authority (ILGA) that would effectively ensure it remains distanced from the day to day business dealings of Crown.
