Battle for control resumed
US private equity giant Blackstone Inc., has resumed its battle for control of Australia’s Crown Resorts with a fresh AU$8.5bn (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 latest offer of AU$12.50 (US$9.10) per share represents its third bid for Crown following other attempts in March and May. According to Reuters, the fresh offer’s value is 26% higher than the Thursday closing price for Crown shares.
The offer has several conditions attached, including unanimous backing from the Crown board. Crown responded to the bid saying its potential takeover by Blackstone would be conditional on the bidder receiving 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 believe that it would not receive approval. As such, Blackstone confirmed it is ready to go ahead with the proposed transaction, if and when regulators give their ultimate confirmation of suitability.
Australian councilor and journalist Stephen Mayne, however, took to Twitter to express his skepticism that governments in Victoria, NSW, and WA would give their nod to Blackstone owning 100% of Crown:
Getting the local governments on board in the three Australian states could prove a difficult challenge for Blackstone. An NSW inquiry in February found Crown unsuitable to hold a Sydney casino license. Meanwhile, in WA there’s an ongoing royal commission’s report into Crown Perth to consider, added to rulings in Victoria on the back of another royal commission investigation.
Belief in reform
Blackstone, however, already has a 9.9% stake in Crown that it bought from Melco Resorts in April for AU$8.15 (US$5.92) per share. The revitalized bid reflects Blackstone’s belief it can rehabilitate the scandal-ridden Crown, which became a more attractive bet last month following the outfit retaining its prized Melbourne casino license.
Following Blackstone’s latest bid, Crown said its board has not yet formed an opinion on the merits of the takeover. “It will now assess the proposal having regard to the value and terms of the proposal and other considerations,” the casino operator confirmed in a Friday statement.