Blackstone Group ups offer to $6.2B to acquire Crown Resorts

Blackstone Group ups offer to $6.2B to acquire Crown Resorts

Blackstone Group has reintroduced its interest in troubled Australian casino operator Crown Resorts, with a new offer of A$12.50 per share, valuing the firm at A$8.5 billion ($6.2 billion). 

Blackstone Group still keen on Crown Resorts 

This bid follows two previous overtures made earlier this year by the US investment management business and affiliates, which valued the group at A$12.35 per share after a first A$11.85 offer was judged an undervaluation and “not in shareholders’ best interests.”

Crown noted that it has “not yet formed an opinion on the merits of the proposal,” adding that it will now evaluate the submission in terms of value, terms, and other factors, in addition to engaging key stakeholders, including regulatory bodies. “At this stage, Crown stockholders are not required to take any action in response to the Proposal. The proposition does not guarantee that it will result in a transaction,” the company warns.

According to Blackstone, the Proposal is subject to a number of criteria, including the group undertaking due diligence on Crown on an exclusive basis, including regulatory, commercial, operational, financial, taxation, legal, and accounting aspects.

Additionally, the group will require final approval from its investment committees, a unanimous recommendation from the Crown board of directors, and a pledge from all Crown directors to vote in favor of the Proposal.

Any prospective acquisition of Crown would be subject to final clearance by the gambling regulators in Victoria, New South Wales, and Western Australia.

Blackstone noted that it has “worked with regulators on this matter” and that its experts have suggested that there is no reason to anticipate that permission will not occur. 

Troubled Operations

The company is said to be prepared to proceed with the proposed transaction despite the ongoing Perth royal commission and consultation process with the NSW Independent Liquor & Gaming Authority, as well as the fact that legislation to implement the Victorian Commission’s recommendations has not been finalized or passed, or the current AUSTRAC investigations have not been concluded.

However, “the repercussions or outcomes of these processes may have an effect on the intended transaction” it is underlined. 

This month, Crown Resorts retained its Melbourne casino license, despite a royal commission finding the group “unsuitable” due to its “illegal, dishonest, immoral, and predatory” behavior. 

The royal commission was established in response to a damning investigation in New South Wales, commissioned by the ILGA and overseen by retired supreme Court judge Patricia Bergin, which concluded that the corporation is unfit to run the $2.2 billion Crown Sydney Hotel Resort.

The nearly 800-page assessment of Crown’s suitability, which was prompted by allegations made by Australia’s Nine Network, the Sydney Morning Herald, and The Age, alleged that Crown, or its agents, affiliates, or subsidiaries, engaged in money laundering; violated gambling laws; and partnered with junket operators linked to drug traffickers, money launderers, human traffickers, and organized crime groups.

Shortly after Victoria launched its investigation, Western Australia ramped up its probe to a royal commission, which it said will also examine the state’s regulatory framework, including any actual or perceived conflicts of interest among casino regulatory officers, as well as any matters that may enhance the Gaming and Wagering Commission’s future capability and effectiveness.

About Lou De Aguila

Lou Aguila is a news and feature writer for Golden Casino News. For over a decade, Lou has published news and featured articles for some of the most reputable sports betting and online casino sites in the world, including BetNow.UK, VegasOdds, and BWin. Apart from being a hardcore live casino punter, he also covers sports stories in North American leagues from time to time.