- Legal States
Filip Mishevski March 29, 2022 3 min read
Blackstone’s Acquisition of Crown Resorts Now Closer to Realization
The Foreign Investment Review Board has given the green light on Blackstone Group’s proposed acquisition of Crown Resorts and in doing so, the first hurdle has been passed as the Australian government has no objection to the purchase.
Blackstone Offered $6.5 Billion All-Cash to Buy Crown
Blackstone’s offer of AU$8.9 billion ($6.5 billion) was met with good faith by Crown’s chairman, Ziggy Switkowski. Once the offer was put to the table, Switkowski stated that the all-cash deal will provide Crown’s shareholders with “certainty of value.”
Shareholders were also asked to vote in favor of the proposition as the offer was just too good to be passed.
In a filing made on Tuesday, Crown stated that Blackstone received a written confirmation from the Foreign Investment Review Board that the government does not have any objections to the purchase.
Even though a key clause of the Scheme Implementation Deed is satisfied, Crown informed its shareholders that this is not the end of the road as there are numerous other conditions that need to be met. That includes court approval, gaming regulatory authorities approval, and Crown shareholder approval, among others.
Blackstone Tried to Purchase Crown on Multiple Occasions
The current offer, which stands at AU$13.10 ($9.8) per share, has been met with praise, but Blackstone tried to purchase Crown on multiple occasions. The first offer by Blackstone was made on March 22, 2021, when the company offered to purchase Crown at a price of AU$11.85 ($8.86) per share.
In May, the offer was revised and the new price was AU$12.35 ($9.24) per share, but this was also rejected by Crown’s board. The final offer of AU$13.10 ($9.8) was made on January 13, 2022, and Crown shareholders are now advised to accept the offer.
Switkowski stated that when considering a proposal of any kind, the board of Crown stays committed to maximizing the value for its shareholders. He added that the management and board of the company has made significant progress recently, especially in terms of the regulatory problems and the pandemic.
Blackstone’s current stake in Crown is 9.99%, which was purchased from Melco Resorts & Entertainment in 2020. Melco was on a mission to purchase a second tranche after Crown was found unsuitable to hold a license in NSW.
Apart from Blackstone, Oaktree Capital Management also showed interest in purchasing Crown Resorts. Star Entertainment, which is also under scrutiny over AML breaches, was planning to merge with Crown but backed off in July. Now, Star is facing an executive purge as its CEO handed over his resignation in the wake of the company’s arising legal problems.