The non-binding proposal suggests a share exchange ratio of 2.68 Star shares for each Crown share, valuing Crown shares at $14 each. Crown shareholders have the option to receive a cash alternative of $12.50 per share, up to 25% of Crown’s issued share capital. The proposed merger would result in Crown shareholders owning 59% of the merged entity, while Star shareholders would own the remaining 41%. This merger is seen as a highly attractive opportunity for shareholders due to the creation of a national tourism and entertainment leader in Australia. The merged group is expected to generate annual cost synergies ranging from $150.0m to $200.0m, with a net value estimate of $2.0bn. The overall worth of the operation is projected to be approximately $12.0bn, with a focus on growth opportunities in marketing, events, digital and technology initiatives, investment in online capabilities, and optimization of a combined loyalty program.
Star hopes to complete necessary due diligence and finalize binding merger and definitive debt financing documentation within the next three months. Additionally, plans are in place to engage with various investors regarding a potential sale and leaseback of the enlarged property portfolio during the diligence process. Crown has also received a revised takeover proposal from Blackstone Group, which offers a cash amount of $12.35 per Crown share. However, this offer is lower than the valuation and cash alternative proposed by Star.
Furthermore, Crown has appointed Steve McCann as its new chief executive and managing director, with his official joining date set for 1 June, pending certain probity and regulatory approvals. The Crown board will review both the Star proposal and the Blackstone revised offer before making further announcements and states that there is no guarantee that either proposal will result in a transaction.
