Crown Appears Ready to Accept Fourth Blackstone Offer

At the end of 2021, Crown Resorts had made it clear that it was rejecting a bid from Blackstone Group. The US-based investment management company proposed a buyout of Crown for several billion dollars. Crown turned it down as other companies proposed the acquisition of Crown as well. In the end, it sounded like Crown was turning down Blackstone Group, as well as Oaktree Capital Group and Star Entertainment. But a new offer on the table from Blackstone in the new year shows indications that Crown is seriously considering it.

Blackstone, Takes One and Two

The investment company approached Crown Resorts in March 2021 with a $6.2 billion offer.

The company didn’t appear out of the blue, as it already held 10% of Crown’s stock. And its interest in casinos wasn’t new, as it acquired the Bellagio, Aria, and Vdara properties in Las Vegas in just the last several years.

Many Crown investors, however, felt that the $11.85 price per share was too low. And if that doubt wasn’t enough, Oaktree Capital Group – a private equity firm, also based in the United States – stepped in with a new offer. And that prompted Blackstone to increase its offer, not to be outdone.

Only months into that battle, Star Entertainment threw its hat into the ring in May 2021. That bid was several million dollars more than Blackstone’s original bid and took the value up to $14 per share. It also included a promise to end all international junkets and make all properties cashless. To this, Oaktree responded with a new bid as well, one that included an extra few billion dollars to buy out James Packer.

By late August 2021, Crown had ended all talks with all prospective buyers.

Blackstone Group, Take Three

After the dust settled for a few months, Blackstone Group invited itself back to the bargaining table in November 2021. That time, it put A$8.5 billion on the table. It put the value of Crown shares at $12.50, which had been 26% higher than the closing price at that time.

The latest Blackstone offer came at a time when Crown faced more public scrutiny and the results of even more investigations and commissions. The New South Wales Independent Liquor and Gaming Authority (ILGA) inquiry was intensive, damaging, and damning. The final report from Commissioner Patricia Bergin only bolstered the efforts of the Victorian Commission and others from AUSTRAC and the WA Royal Commission.

A part of Blackstone’s proposal was that Crown would grant the potential buyer exclusive access to Crown’s financials.

Even so, the answer was no. The Crown Board of Directors said that the bid did not represent “compelling value for Crown shareholders.” But it urged Blackstone to reevaluate its bid – again – after having seen its books.

Blackstone, Take Four

In some parts of society, a fourth bid for approval might be viewed as harassment. In the world of high-stakes business, it’s seen as tenacity.

Blackstone Group issued another new bid for Crown Resorts. The new proposal didn’t represent a significant increase from the previous bid but did put the price at A$8.87 billion, valuing the shares at $13.10 each. The non-binding proposal also included a complete buyout of James Packer’s 37% holdings. Packer would walk away with more than A$3 billion.

The caveats of the deal included the completion of further due diligence, unanimous support by the Crown Board, and final approval from all casino regulatory bodies in New South Wales, Victoria, and Western Australia.

Fourth Time is a Charm

The sweetened deal appealed to Crown Resorts. It had provided an open-book look at its financials, which resulted in a slight but significant enough increase in the overall bid and share price. The idea of removing Packer from the company’s involvement in total was also quite appealing.

On 13 January, Crown announced that financial and legal advisors, as well as the Crown Board, agreed to consider the new proposal. It invited Blackstone to submit a final proposal and discuss the terms of an implementation agreement. They welcome the binding offer, which will put Crown in a position to engage with relevant stakeholders and regulatory agencies and shareholders about the deal.

Reuters reported that major investors, including Packer, support the approval of the deal. And they hope to finalize the agreement by the end of January 2022.

One large investor, Perpetual, said it supports the offer unless a better one comes along.

With that said, Reuters also reported that Crown appears willing to continue talking with Star Entertainment as well.

The past two weeks since that announcement brought nothing new. Only one week remains in the month of January.

 

 

Rose Varrelli avatar
Rose Varrelli
Senior Casino & News Writer

Hi there! I’m Rose, and with nine years behind me in the iGaming industry, I craft engaging narratives at CasinoAus. My education in Communication across Europe has sharpened my skills in fintech, casino legislation, and digital marketing. Backed by a strong foundation in SEO, storytelling, and cross-cultural communication, I’m passionate about creating content that resonates globally and educates our audience.

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