Blackstone is likely new owner of the crown resorts
Crown Resorts agrees to be purchased by Blackstone
A billion-dollar takeover is imminent in the gambling industry. Australian casino operator Crown Resorts said that it would accept the offer from investment company Blackstone on Monday morning. If shareholders and regulators have no objections, nothing is standing in the way of the US company’s $6.5 billion (€5.75 billion) purchase.
Crown said Blackstone would pay shareholders USD 9.30 per share in a stock exchange announcement. This price is 32% higher than Crown’s share price on 18 November 2021 and represents a 10.5% increase on the initial offer from US investors. Blackstone is thus offering a “substantial price” for the casino operator.
The now accepted offer is above Crown’s current share price. However, the purchase price ranks below the company’s 2019 valuation, when shareholders valued it at $10.15 per share. However, the subsequent Corona pandemic and Crown management’s involvement in possible criminal activity had subsequently caused the share price to plummet to USD 5.20.
Putting Crown back on the road to success
Blackstone already holds 10% of Crown’s shares. However, with the investor’s takeover of the entire gambling group, financial analysts hope that Crown could be put back on the road to success.
The new ownership structure is an important step to removing existing reservations of the Australian gambling authorities, according to Angus Gluskie, Managing Director at Crown shareholder White Funds Management.
Although he already retired from management last year, Crown co-owner James Packer is one of the biggest beneficiaries of the deal. If the deal goes through as planned, the Crown founder will receive more than $2.3 billion for his 37% stake.
Crown management will send detailed information about the sale to shareholders next March or April. It will recommend that shareholders accept Blackstone’s offer. To complete the sale, 75% of owners must approve the deal.
On the Sydney Stock Exchange, traders reacted positively to the news. Crown’s share price rose by over 2.2 % to USD 8.98. Financial analysts expect the deal to be completed in the year.