In Australia and casino operator Crown Resorts Limited has reportedly rejected a takeover bid from American private equity management behemoth The Blackstone Group Incorporated widely believed to be worth in the region of $6.6 billion.
According to a report from the Bloomberg news service, the Melbourne-headquartered firm unanimously rebuffed the offer earlier today due to a belief that the attempt undervalued its assets and potentially presented too much regulatory uncertainty. The casino giant was purportedly also put off by the fact that the approach had been formulated using its most recent financial results, which it asserted were severely affected by the impacts of the coronavirus pandemic.
Sydney snag:
Crown Resorts Limited is responsible for the giant Crown Melbourne and Crown Perth facilities but was earlier this year refused a state gambling license for its new Crown Sydney development. The snub regarding this $1.5 billion Sydney property came after an official investigation from the New South Wales Independent Liquor and Gaming Authority determined that the company may have been complicit in a slew of money laundering offences tied to its previous use of foreign junket firms.
Original approach:
This unfavorable February determination reportedly sent Crown Resorts Limited into turmoil and prompted The Blackstone Group Incorporated to make an initial $6.2 billion approach that was contingent upon a number of factors including the securing of a New South Wales gaming license. The New York-listed suitor purportedly increased its cash offer by some 4.2% nine days ago after rival Australian casino operator The Star Entertainment Group Limited threw its hat into the ring via a $9.4 billion merger proposition.
Serious submission:
Bloomberg reported that the rebuff of the offer from The Blackstone Group Incorporated has now put The Star Entertainment Group Limited ‘in the box seat’ to cement its proposed union with Crown Resorts Limited. Such a merged entity would purportedly control seven properties spread across four states although the latter firm’s directors have since requested more information so as to be better able to ‘understand various preliminary matters.’
Problematic probes:
For its part and the online news domain at MarketWatch.com reported that this proposed amalgamation could be still further complicated by ongoing investigations into Crown Resorts Limited’s business being conducted by regulators in Victoria and Western Australia. The casino operator has already purportedly been told to cease using junkets at its Crown Perth venue and last week voluntarily agreed to eschew the services of such enterprises for any future New South Wales facility.
Investor interest:
News of The Blackstone Group Incorporated snub reportedly sent the value of individual shares in Crown Resorts Limited up by 0.1% to approximately $10.13 to give the casino company a market valuation of slightly above $6.8 billion. It purportedly moreover helped single interests in The Star Entertainment Group Limited to advance by 0.3% to $3.16 so as to give the Brisbane-headquartered entity an aggregated capitalization in the region of $3 billion.