Blackstone recently submitted an increased takeover proposal for Crown, offering AUS$12.35 in cash per Crown share, a 4% increase from their previous offer in March. However, Crown’s board determined that the latest proposal undervalued the business and was not in the best interest of shareholders. The board also expressed concerns about the regulatory approval clause, citing significant uncertainty regarding the timing and outcome of the processes.
In their analysis, the Crown board raised additional concerns about the timing of the acquisition proposal due to the impact of the Covid-19 pandemic on Crown’s recent financial performance. They also had reservations about the duration of the deal process, the low takeover premium offered, and the implications of reducing Crown’s debt through the sale of Crown Sydney apartments.
Crown stated their commitment to maximizing value for shareholders and their willingness to consider any acquisition proposal that aligns with this objective. They also provided an update on a separate proposal from Star, a rival land-based operator, who proposed merging with Crown to create a combined operation worth approximately Aus$12.00bn. Crown’s board has requested further information from Star to better assess the merits of the proposal.
It is important to note that Crown shareholders do not need to take any immediate action, and there is no certainty that either proposal will lead to a transaction. Additionally, Crown recently announced that its Crown Resorts Melbourne division has been ordered to pay a total of $22.5m as part of measures set out by the New South Wales Independent Liquor and Gaming Authority (IGLA).
The orders from IGLA include a payment of $12.5m towards an inquiry and an annual Casino Supervisory Levy of $5.0m in both FY2021 and FY2022. Crown may also be subject to further consultation for a potential levy in FY2023. Other measures outlined by IGLA include the implementation of card technology in all casino gaming and the cessation of international junket operations, which Crown has already complied with.
