Crown Board Unanimously Recommends Blackstone Offer
The board of Crown Resorts Limited, a leading Australian entertainment group, has given its full support to a lucrative Crown Casino takeover bid from The Blackstone Group. The offer stands at A$13.10 per share, representing a significant moment for the company which operates luxury casino complexes in Melbourne and Perth.
This development follows a series of challenges that have plagued Crown for years. The company's troubles began escalating in 2016 after several employees were arrested in China for illegally promoting gambling. The incident led to intense scrutiny, a revealing 60 Minutes episode in 2019, and ultimately jeopardized its casino licenses.
A History of Regulatory Woes and Failed Bids
By late 2020, Crown's casino license was in serious danger due to findings of misconduct. In February 2021, a regulatory body found the company unfit to hold a casino license for its new Sydney property. Sanctions followed, including a ban on business dealings with its former majority shareholder, James Packer.
This period of instability made Crown a prime target for acquisition. The Blackstone Crown Casino saga began in March 2021 when the group made an initial A$8.02 billion offer after acquiring a 9.99% stake from rival operator Melco. That offer was rejected.
Soon after, in May 2021, Crown's domestic competitor, Star Entertainment Group, proposed a merger. However, Star withdrew its offer just a few months later amidst ongoing regulatory uncertainty.
Details of the Current Takeover Agreement
Blackstone remained persistent. After it was confirmed in October that Crown could provisionally keep its Melbourne license, Blackstone returned with an improved offer. A month ago, they increased it to the current A$13.10 per share.
In a formal announcement, Crown Resorts confirmed its support for the Crown Resorts acquisition:
"The Board has fully considered the Blackstone Transaction and unanimously recommends the proposal, subject to customary terms...and that there is no better proposal."
Crown CEO Steve McCann stated that the offer from Blackstone demonstrated the strength of the Crown brand and the company's commitment to overcoming its past difficulties. He emphasized that the deal would provide certainty of value for shareholders.
What's Next for the Deal?
While the board's recommendation is a major step, the acquisition is not yet final. The full details of the proposed deal will be sent to Crown shareholders in March or April. A shareholder vote is scheduled to take place in the second quarter of 2022 to finalize the landmark transaction in the Australian gaming industry.
