Crown Resorts has declined an enhanced acquisition proposal from Blackstone Group, stating that the bid of A$12.35 per share fails to accurately represent the company’s worth. Blackstone had earlier presented an offer of A$11.85 per share, which was also dismissed.
Following deliberations with financial and legal counsel, Crown’s board of directors maintains that Blackstone is underestimating their holdings. They highlighted their Sydney gaming establishment, currently operating at partial capacity, and the anticipation of substantial cash flow later this year from the sale of upscale Sydney apartments.
In essence, Crown is adopting a firm stance. They contend that Blackstone’s proposition does not align with their potential, particularly with the Sydney casino poised for full operation and their debt diminishing. The extended acquisition timeframe and Blackstone’s demand to suspend shareholder dividends were also met with disapproval from the board. The message is unambiguous: Crown is receptive to a transaction, but only if the valuation is deemed acceptable.
While Blackstone’s attempt to acquire Crown Resorts appears to be unsuccessful, the company remains active. The Crown board is giving serious thought to a consolidation proposition from Star Entertainment Group, currently examining the specifics to determine its feasibility.
Crown indicated they’ve requested additional data from Star to thoroughly assess their proposal. This potential merger could significantly alter the Australian casino industry, attracting considerable attention from observers.
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