Shares of Crown Resorts Limited stepped higher on Monday after backing a $6.30 billion binding takeover offer from Blackstone Inc.
Accordingly, Australia’s largest gaming and entertainment group edged up 2.02% to $9.01 per share. It now trades 4.89% higher since the start of the year.
It also gained 27.39% or 1.94 points from its past-year performance.
At the same time, this upturn sent the firm to a market capitalization of $6.10 billion.
The American private equity giant Blackstone has won its almost yearlong pursuit of the troubled Australian casino operator.
Under the offer, Crown Resorts shareholders will receive $9.33 cash per share. It is below the company share price in 2019, before the onset of the pandemic.
The COVID-19 restrictions and regulatory inquiries significantly damage its operations.
The takeover would give billionaire James Packer an exit route from the casino firm beset by scandals and regulatory setbacks.
Official investigations found that the company had knowingly dealt with criminal organizations and had misled the government authorities.
A public inquiry ruled in early 2021, stating that the business was unfit to run a casino.
In line with this, the gambling license for Crown Resorts’ flagship $1.26 billion casino skyscraper in Sydney remains suspended.
Then, its Melbourne casino, the primary earner of the firm, must operate with a government-appointed supervisor for two years.
Nevertheless, moving towards a new ownership structure is essential in resolving the highlighted regulatory concerns.
Moreover, the agreement would set up a new Crown Resorts’ board and management.
This will include recently appointed Chief Executive Officer Steve McCann and Chairman Ziggy Switkowski.
Blackstone Bid to Crown Resorts Ends Packer Era
Packer’s decision to support the Blackstone bid would effectively end one of Australia’s most storied business dynasties.
His journalist grandfather Frank Packer started Australian Consolidated Press in 1936. This newspaper company dominated the country’s media landscape for more than half a century.
Eventually, the outsize influence of the media empire continued to the next family generation until 2005.
Then, James Packer took the family business in a new direction as he spearheaded the Crown Resorts.
Packer owns about 36.00% of the company, which is pivotal for the 75.00% shareholder approval threshold.
Correspondingly, a meeting to vote on the offer will occur in the second quarter of the year.
Meanwhile, the accord still needs approval from Australia’s Foreign Investment Review Board.
In addition, it needs consent from the gaming regulatory bodies of the states where the casino firm operates.
Blackstone is currently the second-biggest shareholder of Crown Resorts, with a 9.90% stake.
It gave its first takeover offer at $8.44 per share in March 2021. It raised that three times until finally landing at $9.33 last month.
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