$8bn takeover bid for embattled Crown
A private equity giant has lobbed an $8bn takeover bid at Crown Resorts, with the embattled casino operator announcing the offer just two days before facing a royal commission in Victoria over its explosive money laundering scandal.
Crown told the Australian Securities Exchange on Monday it had received an unsolicited, non-binding and indicative proposal from The Blackstone Group of $11.85 cash per share.
That compares with Crown's closing price of $9.86 on Friday.
Crown shares leapt on Monday morning after the bid was revealed, soaring as high as $11.75 in morning trade. They were up more than 17 per cent at $11.56 around midday.
"The indicative price will be reduced by the value of any dividends or distributions declared or paid by Crown," the gaming giant said.
The offer is subject to conditions, including the bidder gaining regulatory confirmation that a Blackstone-owned Crown is considered suitable to own and operate the Sydney, Melbourne and Perth gaming licences and other gambling-related approvals.
Crown is due to face a royal commission in Victoria starting Wednesday, overseen by former Federal Court judge and senior barrister Raymond Finkelstein, who will hand down his findings by August 1.
A royal commission into Crown is also being held in Western Australia, with interim findings expected by June 30, followed by a final report with recommendations on November 14.
Both were sparked by the damning findings of last year's lengthy NSW Independent Liquor and Gaming Authority inquiry, headed by former Supreme Court judge Patricia Bergin, who concluded Crown Resorts facilitated money laundering at its Melbourne and Perth casinos as alleged in 2019 media reports.
The findings resulted in the regulator being advised the company was unsuitable to retain the gaming licence for its new $2.2bn Sydney Barangaroo facility, which had its December opening delayed by the controversy.
"The Crown board has not yet formed a view on the merits of the (Blackstone) proposal," the company said.
"It will now commence a process to assess the proposal, having regard to the value and terms of the proposal and other considerations.
"It will also engage with relevant stakeholders including regulatory authorities."
Blackstone already has a 9.99 per cent stake in Crown, which it acquired from Hong Kong-based casino operator Melco Resorts and Entertainment for $8.15 per share in April.
Reclusive billionaire James Packer has the biggest interest in Crown through his private investment vehicle Consolidated Press Holdings.
He inked a deal to sell a 19.9 per cent interest to Melco, which is linked to a businessman who allegedly had underworld connections, the late Stanley Ho.
But Crown's agreements with the NSW regulator require the company to prevent such people or their associates from becoming a shareholder, so Melco only ended up buying 10 per cent, dumping its plans to buy the second tranche, then offloaded its interest to New York-based Blackstone.
The ill-fated deal was a key aspect of the NSW investigation, which was told Mr Packer was insistent it go through, while a now dumped "controlling shareholder protocol" meant he got special treatment, including access to Crown documents and selective briefings.
Mr Packer says he has now stepped back to being a passive shareholder.
Macquarie Research said Blackstone's bid "comes at a time of uncertainty but may be the start of the end, considering the implied EBITDA (earning before interest, tax, depreciation and amortisation) bid multiple is in the mid-range of the long-run trading range".
It noted Crown received a $14.75 cash and scrip bid by Wynn Resorts in April 2019 that was pulled within 24 hours of being made public.
Originally published as $8bn takeover bid for embattled Crown