Blackstone makes sweetened $6.2 billion play for Australia’s Crown By Reuters

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© Reuters. FILE PHOTO: The logo of the Australian casino giant Crown Resorts Ltd adorns the hotel and casino complex in Melbourne, Australia, June 13, 2017. REUTERS / Jason Reed

By Byron Kaye

SYDNEY (Reuters) – Investment giant Blackstone Group (NYSE 🙂 Inc has a $ 6.2 billion approach.

Crown’s A $ 12.50 per share proposal published Friday is Blackstone’s third and has propelled Crown’s shares 16% higher. The stock was still below Blackstone’s indicative price, suggesting some doubt that a deal will come about.

The revamped offering puts Blackstone in the box to take control of Crown, which has faced devastating investigations of misconduct and lengthy COVID-19 lockdowns in every state it operates.

Competing bidder Star Entertainment Group Ltd, an Australian casino operator, has withdrawn its proposed deal, citing regulatory uncertainties. It is now confronted with its own allegations of misconduct.

Crown is still facing a public anti-money laundering governance and compliance investigation and a federal anti-money laundering investigation at its second largest casino in the state of Western Australia.

The company, founded by billionaire James Packer, has already admitted to regulators in New South Wales and Victoria that it has not prevented criminal transactions.

The most momentous of the inquiries that threatened to revoke its gaming license in Victoria to less than three-quarters of Crown’s profits finally gave the company clearance to continue operating under supervision last month.

Crown had preferred Star’s buyout approach over a previous Blackstone proposal, but Star’s problems are threatening to derail its offer and Blackstone’s latest proposal matches Star’s cash option.

“Crown is a high quality, strategic asset,” said Steve Johnson, chief investment officer for Forager Funds Management.

It is “not surprising that private equity is back on the table” after retaining its Victorian license, added Johnson.

Crown said its board of directors will consider Blackstone’s latest proposal, although they have not yet formed an opinion on its merits.

A spokesman for Blackstone, Crown’s second largest shareholder with 9.99% of the shares, confirmed the offer without further comment. A star representative was not immediately available for comment.

($ 1 = 1.3740 Australian dollars)

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