The Blackstone Group Incorporated again sweetens its Crown Resorts Limited buyout proposal

American private equity management firm The Blackstone Group Incorporated has reportedly lodged a second improved offer in its effort to take over beleaguered Australian casino operator Crown Resorts Limited.

According to a Thursday report from the Reuters news service, the latest proposal from the New York-headquartered enterprise would see it purchase all of the issued shares in Crown Resorts Limited at an individual price of about $9.05. The source detailed that this rate would be higher than the $8.58 and $8.94 offers the financial services giant made in March and May respectively to give the entire proposition a revised price tag of almost $6.2 billion.

Prominent position:

The Blackstone Group Incorporated is reportedly already the second largest shareholder in Crown Resorts Limited although its current 9.99% interest is dwarfed by the around 37% stake held by the Sydney-listed casino operator’s founder, controversial Australian businessman James Packer (pictured). News of this latest offer purportedly pushed the price of individual shares in the Melbourne-headquartered company up by over 15% yesterday to roughly $8.39 although this is still well below the $10.32 mark recorded in August of 2018.

Recent reversal:

Crown Resorts Limited is responsible for the gambling-friendly Crown Melbourne and Crown Perth facilities in Australia alongside the United Kingdom’s prestigious Crown London Aspinalls property. However, the operator has been suffering of late after it was refused a casino license for its new Crown Sydney venue owing to allegations that it may have been complicit in a slew of money laundering offences tied to its past use of foreign junket firms.

Pickle potential:

To make matters worse and Crown Resorts Limited recently had the casino operation inside its 1,600-room Crown Melbourne facility placed under a two-year probationary scheme after an official royal commission examination uncovered numerous historical shortcomings in the property’s anti-money laundering controls. This state of affairs could purportedly get even more dire as an analogous Western Australia probe is due to finish its own activities in March even as the operator continues to come to terms with the financial turmoil of the ongoing coronavirus pandemic.

Contending campaign:

For its part and Business News Australia used a report on the matter to note that the revised offer from The Blackstone Group Incorporated comes some four months after rival casino firm The Star Entertainment Group Limited pulled an analogous $8.7 billion takeover attempt. This bid had purportedly been preferred by the board of directors at Crown Resorts Limited but was scrubbed as the bidder was facing calls to have its own anti-money laundering protocols similarly scrutinized.

Executive examination:

Crown Resorts Limited used an official filing (pdf) to declare that its board of directors ‘has not yet formed a view on the merits’ of the revised offer from The Blackstone Group Incorporated but now intends to assess the proposition ‘having regard to the value and terms of the proposal and other considerations’. The casino firm furthermore asserted that it will be engaging ‘with relevant stakeholders including regulatory authorities’ such as the New South Wales Independent Liquor and Gaming Authority, the Victorian royal commission and the Australian Transaction Reports and Analysis Centre (AusTRAC) watchdog but cannot guarantee that ‘the proposal will result in a transaction’.

Reportedly read a statement from Crown Resorts Limited…

“Any acquisition of Crown Resorts Limited by The Blackstone Group Incorporated would be conditional on The Blackstone Group Incorporated receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia. The Blackstone Group Incorporated has stated that it has engaged with the regulators in relation to this issue and that the regulators’ advisers have indicated to The Blackstone Group Incorporated that there is no reason to believe that an approval would not be realized.”