James Packer’s casino operator Crown Resorts has confirmed an $ 8 billion takeover bid from US private equity giant Blackstone

The ASX-listed Krone has confirmed an unsolicited, non-binding offer of USD 1185 Blackstone submitted one share to the company yesterday

With just over 677 million shares in the company, Crown’s initial offering price is just over $ 8 billion This corresponds to a premium of 19 percent over the share price since the last financial report was published last month

Blackstone already owns nearly 10 percent of Crown, which it bought from Melco Resorts in April 2020 for $ 815 per share

According to financial news service Reuters, the investment firm owns Bellagio Casino in Las Vegas, which it recently acquired for $ 425 billion ($ 5 billion), and also owns a casino resort called The Cosmopolitan in Las Vegas as well as the Spanish arcade operator Cirsa

JP Morgan analysts point out that Blackstone is generally a real estate owner – in the case of Bellagio and other Las Vegas casino investments in MGM Grand and Mandalay Bay – the private equity firm owns the real estate, but MGM does manages the casino operations and pays rent

Analysts say Blackstone’s offer is very conditional as it is contingent on regulatory approval that the private equity firm is an appropriate person to own and own Crown’s Sydney, Melbourne and Perth casinos operate – although they suggest that Blackstone could buy Crown for its property and rent it to an appropriate operator such as Star Entertainment Group

Given that Wynn Resorts was ready to make an (abandoned) takeover bid of $ 14, as recently as April 2019, JP Morgan analysts see the offer as low

“Based on where Crown (and Star Entertainment Group) were trading prior to COVID-19 (and with Barangaroo’s upside potential), our initial estimate of $ 1185 / share would not be enough for shareholders and board approvals “they wrote in a note

However, Monash University gambling expert Charles Livingstone believes there is a chance that Mr. Packer and other current shareholders will accept a low-ball offer to leave the company and leave his current troubles behind / p>

“The removal of Mr. Packer from the ownership structure and the change of board of directors would go a long way in resolving concerns, as would the new management,” he told The Business

“The reality is that Blackstone operates casinos all over the world in Europe and the United States, has a lot of experience in the business, and would likely be able to overcome regulatory hurdles fairly easily

“You are getting a bargain price because new owners would definitely fix a lot of the problems”

James Packer is Crown’s largest shareholder The latest data on data from Refinitiv shows that Mr. Packer’s Consolidated Press Holdings owned approximately 36 percent of the casino’s shares

Crown said its board of directors has not yet formed an opinion on the merits of the proposal and will initiate a process to evaluate the proposal

In morning trading, Crown shares rose 176 percent to $ 11, reflecting investor optimism that the acquisition will continue

In the meantime, shareholders have been advised that they need not take any action and that there is no certainty that the proposal would result in a transaction

Another change is coming for competitive casino giant Crown Resorts, and major shareholder James Packer may have to radically reduce its stake, writes business reporter Daniel Zahl

Crown recently received a damning report commissioned by the NSW Independent Liquor and Gaming Authority

The Bergin report concluded that the company is currently unable to hold a casino license in the state due to concerns about its governance and the potential of money laundering and other organized crime entities to its Exploiting activities

The report resulted in the departure of Crown’s chief executive and a large number of its directors

Blackstone’s takeover bid comes despite Crown facing royal commissions in Victoria and Western Australia starting Wednesday for being able to hold its casino licenses in those states amid concerns about money laundering and organized crime

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World news – AU – Crown receives a private equity takeover offer of 8 billion from Blackstone USD

Source: https://www.abc.net.au/news/2021-03-22/crown-receives-private-equity-takeover-offer-from-blackstone/13266246