US private equity firm The Blackstone Group has put forward a new bid to acquire all shares in Australia’s Crown Resorts.
According to a statement issued by Crown early Friday, the latest bid values Crown at around AU$8.5 billion (US$6.2 billion), with Blackstone offering AU$12.50 in cash per share by way of a scheme of arrangement.
The offer is higher than Blackstone’s previous bids of AU$11.85 per share and AU$12.35 per share earlier this year, which Crown knocked back in May claiming it undervalued the company’s assets and future earnings power.
The revised offer follows the recent release of findings from Victoria’s Royal Commission into Crown Melbourne, which refrained from revoking or suspending Crown’s casino license and instead provided a two-year window under the watch of a special manager for the company to prove it is suitable.
Crown is also working with the regulator in New South Wales to reach suitability and open the casino at Crown Sydney, while the findings of a Royal Commission into Crown Perth are due to be handed down early next year.
According to this morning’s announcement, Blackstone’s latest proposal is subject to a range of conditions, including due diligence on Crown covering regulatory, commercial, operational, financial, taxation, legal and accounting matters, Blackstone receiving final approval from its investment committees, a unanimous Crown Board recommendation and a commitment from all Crown directors to vote in favour of the proposal and execution of a binding Implementation Agreement incorporating various terms and conditions, including a range of conditions relating to Blackstone’s regulatory approvals and Crown’s casino licences.
“Any acquisition of Crown by Blackstone would be conditional on Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia,” the statement read.
“Blackstone has stated that it has engaged with the regulators in relation to this issue and that the Regulators’ advisers have indicated to Blackstone that there is no reason to believe that an approval would not be realised.”
Blackstone added it would provide equity financing for the proposed transaction through one or more of its affiliated funds and the proposed transaction would not be subject to any financing condition.
The Blackstone Group already holds a 9.99% stake in Crown Resorts which it acquired from Melco Resorts & Entertainment in April 2020. Melco had purchased the 9.99% stake from James Packer’s Consolidated Press Holdings a year earlier but backed out of a deal to purchase a second tranche after regulators in New South Wales launched an independent inquiry, which ultimately led to a finding of unsuitability by the NSW regulator in February.
Blackstone was one of two major international investment groups to express an interest in Crown earlier this year, while rival casino operator Star Entertainment Group withdrew a merger proposal in July.