The Crown sweepstakes has taken a turn for the better for Blackstone, the multinational investment firm, that has had a series of bids for Crown Resorts, the Australian gaming company that has run afoul of regulators over the past couple of years. Blackstone upped its bid by 5 percent to A$8.87 billion (US$6.46 billion). Blackstone’s previous bid was A$12.90, which Crown rejected as “not compelling.” The new offer values a share at A$13.10, which was more favorably received by Crown.
According to a source quoted by Reuters, all major shareholders had agreed to the price, including former chairman, James Packer, who owns 60 percent of the company.
Consolidated Press Holdings (CPH), a company controlled by Packer, and which owns 37 percent of Crown, issued a statement affirming the deal.
“CPH will review all documents released to the market by Crown Resorts relating to a binding control transaction prior to making a decision regarding its shareholding,” the release said.
Investment manager Perpetual, Crown’s third-largest shareholder with a 9.2 percent stake, said it liked the offer as long as no better offer came along.
The overall market liked the deal as well, with Crown stock advancing nearly 10 percent to A$12.68, the highest level since June 2021.
“It is likely that a deal will get done,” Steve Johnson, chief investment officer at Forager Funds Management, a Crown shareholder, told Bloomberg. “The increase in offer price is a welcome step in the right direction and we are supportive of the board continuing a push for an appropriate firm offer for shareholders,” he said.
That leaves it up to Star Entertainment, Australia’s second-largest gaming company to consider upping their latest bid. Crown rejected an offer from Star for A$9 billion, but the deal wasn’t all in cash, and Star later withdrew it.
After the Blackstone by Star said it “remains open to exploring potential value enhancing opportunities with Crown.”
But Star has its own regulatory problems, very similar to the Crown situation, citing the same money laundering issues that nearly took down Crown. Hearings will begin in March, but it’s likely the Blackstone-Crown buy will be completed by then.
