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Crown rejects Blackstone offer but Star still not in the clear

Business

The battle for control of Crown took another turn today as the company rejected the $8 billion offer from private equity group Blackstone.

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That leaves the Brisbane-based Star merger plan that would create a $12 billion gambling and resorts giant as the only active bid, but Crown also said it had not yet made a decision and had asked Star for more information.

A key issue has been Blackstone’s issue with getting regulatory approval to operate casinos and Crown said there was significant uncertainty about the timing and outcome of the regulatory approval process.

“As a result, the conditions of the revised proposal as currently understood present an unacceptable level of regulatory uncertainty for Crown shareholders,” the company said.

Star is in a much better position because it already operates casinos in Sydney, the Gold Coast and Brisbane but the ACCC has said it would look closely at the bid.

The Crown board also said it considered other issues including Crown’s fundamental value.

It said its Sydney casino was not yet running at full capacity and was yet to make a meaningful contribution to Crown’s earnings. The pandemic had also meant long closures of its Melbourne casino.

It also took issue with Blackstone’s requirement that any dividends paid during the proposal be deducted from the $12.35 offer price. It also said the bid undervalued Crown.

Crown said it had not yet formed a view about the Star offer.

“To facilitate the Crown board’s assessment of the merger proposal, Crown has requested Star to provide certain information to allow the Crown board to better understand certain preliminary matters,” it said.

 

 

 

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