Crown Resorts could be taken over by Blackstone
The Australian gambling group Crown has been around for years in the headlines. First there were negative reports with allegations of money laundering. The investigations then dragged on and as a result of the investigation results, Crown's license for the casino in Barangaroo was revoked. Now Crown is in the news again - it could be taken over by Blackstone.
Blackstone has been interested in Crown Casinos for a long time
It's not the first offer Blackstone has made. This is already the fourth offer. This has now reached a price that Crown could agree to. All previous offers were rejected by Crown, as the bid was described as too low. With the fourth offer, Blackstone has increased itslast price by nearly five percent. Blackstone is therefore willing to pay AUD$13.10 per share.
This results in a total amount of almost nine billion AUD - which corresponds to the equivalent of 5.6 billion euros. This is an offer acceptable to Crown. Crown itself has not commented on this offer, but Crown shareholder Forager Funds Management has. The CEO of this company has officially spoken out and has indicated that the deal between Blackstone and Crown will most likely come about. At the very least, Forager Funds Management wants to help Crown's board make the right decision.
Other investment companies have a different opinion
There is not only one investment company involved in the Crown gambling group. There is one private investment company that is very different. These are Consolitaded Press Holdings, which are less enthusiastic. According to a statement from this company,all data must first be checked before a decision is made. Blackstone has shown a strong interest in Crown for some time. However, there are other gambling companies that either only make a purchase offer earlier or continue to do so.
The news agency Reuters is also of the opinion that the offer could be increased. According to Reuters, it is quite conceivable that further offers will be received. Nevertheless, Crown is currently benefiting from Blackstone's higher offer: thevalue of the shares has increased and is now eight euros. This is the highest value that the shares have achieved since the investigation began.
Crown continues to give other companies a chance
Crown has mentioned in a public statement that Blackstone has a very good chance. However, Crown has also indicated that it wants to await further offers. Should no better offers be submitted, Blackstone could be awarded the contract. It must be noted that there have been other gambling groups that have even made a higher offer.Star Entertainment for example had set its bid at A$9 billion, while Blackstone is just below that.
So for a short time it seemed like Crown would be taken over by Star Entertainment. The company withdrew itspurchase offer after becoming the focus of investigations. The company has not been accused of money laundering. However, there are allegations that certain regulations have not been complied with. Star Entertainment has indicated to Reuters that it remains interested in acquiring Crown. Once the investigation is complete, Star Entertainment could make another bid.
But alsoCrown has indicated that it would continue to accept offers from Star Entertainment. Crown even suspects that Star Entertainmentonce the investigation is complete could make an even higher offer.
Former interested parties left
The bidding process for the takeover of Crown has been going on for a long time. A year ago, there were several gambling groups that expressed interest in Crown. Also,Sands was in negotiations with Crown. At least that was published last year. Originally, Sands wanted to focus on its casinos in Asia. However, after the corona pandemic led to a decline in customers and thus sales in these countries as well, Sands looked elsewhere. Buying the Australian casinos would have been a good investment.
The Wynngambling group saw it similarly. This well-known gambling group made an offer to buy Crown back in 2019. However, Crown's offer was rejected. Further justifications are not available. It is also currently not possible to estimate whether the two gaming groups mentioned are still interested in Crown. The allegations against Crown may also stand in the way.
In the meantime, things looked very good for Crown and the company probably met all the conditions set. Thanks to this, Crown should regain the license for Barangaroo. However, a twist happened recently and Crown was once again in the headlines. At the same time, afine of one million AUD was imposed on Crown.
Acquisition could be completed by June
Regardless of whether and which offer Crown chooses, the acquisition will take some time. All shareholders must first agree to a takeover. This can take a while. If no agreement can be reached here, it would take even longer. But even after a decision, the deal cannot be closed immediately. If two large gambling companies merge,various supervisory authorities must also agree.
Crown operates casinos inthree different states. The responsible supervisory authorities must therefore also agree. In other countries, it also works in such a way that the authorities responsible for competition also have to agree. This is to prevent a kind of monopoly from coming about. If Star Entertainment took over Crown, then all affected casinos would be in Australian hands. To what extent the authorities will decide here cannot be said.
The tension is therefore maintained. If the news agency Reuters is to be believed, a purchase agreement maystill come out in January of this year. Then only official permission is required.