Crown Resorts board ready to accept takeover offer after Blackstone sweetens bid

January 13, 2022 Ava

Embattled casino group Crown Resorts says it is ready to accept a takeover bid from Blackstone after the US private equity group sweetened its offer by $400m.

If the $8.87bn bid goes ahead it will end James Packer’s association as a shareholder with the company, which has been mired in scandal for two years after government inquiries revealed money laundering at its casinos and the criminal links of junket operators who brought in high-rolling gamblers.

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Packer stands to pocket about $3.1bn in return for the 37% of Crown held by his private investment company, Consolidated Press Holdings.

In a statement to the ASX, Crown said that if Blackstone made a binding offer at the new price of $13.10 a share, and there were no better deals on the table, it was the board’s “current unanimous intention to recommend that shareholders vote in favour of the proposal”.

Packer is under pressure to sell his stake in the company after a Victorian royal commission into Crown in October said he should be required to reduce it to less than 5% by September 2024.

The inquiry found Packer’s investment company had “abused its position as a dominant shareholder, which included retaining significant control over the affairs of the company, even after he resigned as chairman in 2018”.

In his report, tabled in state parliament, commissioner Ray Finkelstein said there were “a litany of failings” in the way Crown dealt with anti-money laundering rules and that it had “facilitated money laundering” through a bank account held by a subsidiary.

The former federal court judge recommended a special manager be appointed to oversee the operation of its Melbourne casino for the next two years.

Victoria’s royal commission followed an inquiry in NSW that found that Crown had facilitated money laundering at its Melbourne and Perth casinos and that some junket operators were linked to organised crime.

The NSW inquiry in turn came after the publication in 2019 of the Crown Unmasked series, which made a series of allegations about the casino company, by Nine Entertainment’s 60 Minutes and its newspapers.

A royal commission is also under way in Western Australia and is set to hear final submissions from counsel assisting, the company and others on 1 February and 2 February.

Consolidated Press Holdings has been contacted for comment.

Blackstone first indicated its interest in Crown in April 2020, when it bought almost 10% of the company from Melco Resorts & Entertainment, a Hong Kong gambling group that was previously a joint venture partner with Crown in casinos in Macau.

It made a non-binding offer for the company at $11.85 a share in April last year and since then has progressively made the proposed deal more attractive by dropping conditions and increasing the price it is willing to pay.

Any takeover would be subject to regulatory approval in Victoria, NSW and WA.

Crown shares were trading about 8.1% higher at $12.58 early on Thursday after closing at $11.63 on Wednesday.

Source: Thanks msn.com