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US-based investment management company Blackstone has launched its third attempt to take over gambling and hotels giant Crown Resorts (ASX: CWN) today, valuing the target at $8.5 billion.
At $12.50 per share, the offer is slightly higher than previous bids made by Blackstone of $12.35 per share on 10 May 2021 and $11.85 per share on 22 March.
Both of those offers were rejected on the basis they undervalued the embattled company, which recently had a Victorian Royal Commission determine it engaged in “illegal, dishonest, unethical and exploitative” conduct at its Melbourne casino and hotel.
Blackstone’s proposal is subject to a number of conditions, including due diligence on Crown, the investment manager receiving approval from its investment committees, and an unanimous CWN board recommendation.
“Any acquisition of Crown by Blackstone would be conditional on Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia (the Regulators),” Crown said.
“Blackstone has stated that it has engaged with the Regulators in relation to this issue and that the Regulators’ advisers have indicated to Blackstone that there is no reason to believe that an approval would not be realised.”
In addition, Crown says Blackstone is prepared to proceed with the proposed acquisition even if the Perth Royal Commission into the target remains ongoing as well as other inquiries into the gambling giant’s business.
“Blackstone has stated that it is prepared to proceed with the proposed transaction…even if the Perth Royal Commission remains ongoing, Crown’s consultation process with the NSW Independent Liquor & Gaming Authority remains ongoing, the legislation to implement the recommendations of the Victorian Royal Commission is yet to be finalised or passed, or the current AUSTRAC investigations are not completed,” says Crown.
“However, the consequences or outcomes of these processes may impact the proposed transaction.”
Blackstone currently has a 9.99 per cent interest in Crown which it acquired from Melco Resorts & Entertainment for $8.15 per share in April 2020.
“The Crown Board has not yet formed a view on the merits of the Proposal,” says Crown.
“It will now 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.”
Shares in CWN are up 15.76 per cent to $11.46 per share at 11.13am AEDT.
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