Crown Resorts: Blackstone Returns With Revised Offer
Blackstone Group returned to the negotiating table and made a revised offer for Crown Resorts. The new bid of $13.10 per share values Crown Resorts at $8.87 billion. Experts predict this bid is large enough for the Crown board to accept.
It is ten months since Blackstone Group offered $8.02 billion for 91.01% of Crown Resorts stock it did not already own. This equates to $11.85 per share, a 19% premium on the Crown share price at the time. The offer sent Crown stock surging 21.4% as shareholders reacted positively to the news.
Crown’s Board rejected the deal because they felt it undervalued the company. Any deal looked dead in the water, but Crown made it clear it was open to a revised offer. One came in late November when Blackstone made a revised offer of $12.50 per share. This valued Crown Resorts at $8.5 billion. Crown rejected this second bid. However, it handed over confidential business information to Blackstone, suggesting possible future negotiations.
Blackstone Lodges $8.87 Billion Revised Offer
Shares in Crown jumped almost 9% on January 13 when news of a revised offer hit the ASX. Crown received a fourth non-binding bid of $13.10 per share, valuing Crown at $8.87 billion.
“Crown Resorts Limited announces that it has received a revised non-binding proposal from a company on behalf of funds managed and advised by Blackstone Inc. and its affiliates to acquire all of the shares in Crown by way of a scheme of arrangement at a price of $13.10 cash per share. This represents an increase of $0.60 cash per share compared to the previous offer price of $12.50 cash per share as announced to the ASX on November 19, 2021.”
“The revised offer is subject to the same conditions as the Blackstone proposal announced by Crown to the ASX on November 19, 2021, including but not limited to completing further due diligence, unanimous support and recommendation by the Crown Board, execution of a binding Implementation Agreement, and Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales, and Western Australia.”
“Following consideration of the Revised Proposal, including obtaining advice from its financial and legal advisers, the Crown Board considers that this is in the interests of Crown’s shareholders to engage further with Blackstone on a non-exclusive basis in relation to the revised offer. Accordingly, Crown has decided to provide Blackstone with the opportunity to finalise its due diligence inquiries and negotiate the terms of an Implementation Agreement so that Blackstone can put forward a binding offer.”
Packer Set To Bank $3.3 Billion Payout
It is not only the Crown board that is happy with the deal because two major shareholders announced they favour this revised offer.
Perpetual, an investment manager, holds a 9.2% stake in Crown. This makes it the company’s third-largest shareholder. A spokesperson for Perpetual said it is in favour of this deal in the absence of a better offer.
James Packer holds a controlling 37% stake in Crown. Packer’s Consolidated Press Holdings is encouraged by the recent developments.
“CPH will review all documents released to the market by Crown Resorts relating to a binding control transaction prior to making a decision regarding its shareholding.”
The revised offer values Packer’s holding at almost $3.3 billion. Packer is no longer actively managing Crown and has wanted out of the casino business for several years. He is about to get his wish. Packer has a net worth of $4.53 billion, which increases to $7.83 billion following the sale.
Will Other Bids Come In?
The market does not expect any other bids for Crown’s stock despite potential suitors now knowing the minimum asking price. Blackstone is keen to get the deal over the line quickly. It cited a late-January date for completion. The Crown Resorts sage is nearing a conclusion.
