Casino giant Crown Resorts says it will recommend shareholders accept a takeover offer by private equity outfit Blackstone worth at least $8.87 billion unless a rival suitor makes a higher bid.
The James Packer-backed outfit said on Thursday morning that Blackstone had increased its previous $12.50 per share offer for the group to $13.10 after it granted it due diligence to inspect Crown’s books in early December.
Crown said it intends to accept the higher offer from Blackstone. Credit:The Age
Crown’s shares jumped 8.17 per cent in the first 30 minutes of trading and at 10.30am were trading at $12.58.
Crown – which owns properties in Melbourne, Perth and at Sydney’s Barangaroo – said that following the higher bid, it will start negotiating the terms of a sale so that Blackstone can put forward a binding offer.
If Blackstone makes a binding offer at $13.10 or more, then “it is the Crown Board’s current unanimous intention to recommend that shareholders vote in favour of the proposal in the absence of a superior proposal”, the company said in an ASX statement.
The fate of any takeover deal sits with the reclusive billionaire James Packer, who owns 37 per cent of Crown and has been looking to exit his stake for a number of years. A sale to Blackstone through a scheme of arrangement would require a shareholder vote with 75 per cent support.
Blackstone’s offer of $13.10 per share is above the $13 which in 2019 Mr Packer agreed to sell a 19.9 per cent stake in Crown to Hong Kong’s Melco Resorts. Mr Packer may also be ordered to sell down his stake to below 5 per cent, as recommended by Victoria’s royal commission into Crown last year.
Thursday’s development throws down the gauntlet to Crown’s Sydney-based rival The Star Entertainment Group, which in May last year proposed a $12 billion merger between the two ASX-listed groups.
The Star withdrew its merger offer as Crown’s licences for its Melbourne and Perth casinos came under threat from royal commissions that examined criminal activity by its customers and other malpractice, but its has said it is still interested in combining the two casino outfits. Star is now the subject of an inquiry by the NSW gaming regulator following allegations of similar governance breaches.
