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Bloomberg
Blackstone doubles its welcome in $ 6.2 billion bid
(Bloomberg) – Blackstone Group Inc. has offered to purchase Crown Resorts Ltd. in an A $ 8.02 billion ($ 6.2 billion) deal, pouncing on the ailing Australian casino operator as it came under attack by national regulators. , which already owns 10% of Crown, offered A $ 11.85 per share in cash to the rest of the company, Crown said on Monday. Crown is pricing the proposal and its stock has climbed 21% to A $ 11.97 when the deal closes in Sydney, indicating investors are expecting a higher bid or a rival suitor. in other properties and faces inquiries about his suitability to own casinos in Melbourne and Perth. But if Crown’s planned corporate makeover may appease regulators, the price for Blackstone is clear: casino monopolies in two Australian cities and a sparkling $ 2.2 billion hotel complex on Sydney’s waterfront. on one of the industries hardest hit by the pandemic – just as vaccines are fueling hopes for a recovery in travel and recreation. Last week, Blackstone partnered with Starwood Capital Group and struck a $ 6 billion deal for hotel operator Extended Stay America Inc. In 2019, Blackstone agreed to buy the Bellagio Casino and Resort in Las Vegas. for $ 4.25 billion. With a 36% stake, Blackstone’s offer represents yet another chance to leave Crown after at least two failed attempts to find a suitor. February’s damning revelation of Crown’s widespread management and cultural failures was just the latest blow for the billionaire, who retired from corporate life to fight mental health. of Blackstone, Crown’s shares were nearly halved from A $ 18. in early 2014. They were hit by a series of tragedies, including a legal crackdown in mainland China in 2016, an aborted takeover and the Covid-19 pandemic. The risk for Blackstone is to remain the owner of a company blocked by new regulatory measures. . Last month’s investigation into New South Wales said Crown needs to review its management, governance and culture before gaming operations can begin in Sydney. Since then, CEO Ken Barton and five other directors have resigned. The investigation found that Crown had “permitted and facilitated” money laundering through bank accounts linked to its Perth and Melbourne casinos for at least five years prior to 2019. The report drew criticism over the relationship. between Crown and Packer’s investment firm: reporting lines were unclear, risks were not identified, and conflicts or potential conflicts were not recognized. said on Monday that the regulator was aware of the takeover approach, but was “unable to comment on the potential results.” An investigation begins Wednesday into Crown’s ability to run its Melbourne casino and a separate Crown Perth investigation will also take place. year. This means Blackstone could be the new owner of a business that is banned – temporarily at least – from operating its three Australian casinos. “This is an important risk to take into account,” said Xinning Xiao, senior lecturer in accounting at Monash Business School. in Melbourne who specializes in corporate governance. “Restructuring can take years.” Representatives for gaming regulators in Victoria and Western Australia made no immediate comment on Blackstone’s potential ownership in Crown. for most private equity takeovers – Blackstone would automatically do the wholesale management restructuring that Crown is likely to need to retain its gaming licenses following a damning money laundering investigation. – David Fickling. In early 2019, Wynn Resorts Ltd. abruptly ended negotiations to buy Crown for around A $ 10 billion, just hours after the talks leaked to the media. Last year, Melco Resorts & Entertainment Ltd. abandoned a deal to buy 20% of Crown from Packer. Macquarie Group Ltd. analysts said late last year that a merger of Crown with Sydney rival Star Entertainment Group Ltd. Even though neither company had publicly addressed the idea. A representative from Packer’s private equity firm declined to comment on Blackstone’s approach. Blackstone wants unanimous approval from the board of directors of Crown before the deal could go ahead, as well as regulatory approval to own and operate Crown’s casinos, the statement said. Blackstone bought its current stake in Crown from Melco last year. for A $ 8.15 per share. For more articles like this please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP
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