US private equity giant Blackstone Group Inc has launched a takeover bid for scandal-tainted Crown Resorts Ltd, just weeks after the Australian group was denied a license to run a multibillion-dollar Sydney casino, the gaming group said yesterday.
Crown shares soared more than 20 percent on the Australian Stock Exchange after the pre-trading announcement it had received the “unsolicited, non-binding and indicative proposal” from Blackstone on Sunday.
The casino operator, which is subject to multiple inquiries into allegations of money laundering and ties to organized crime, said the bid was for A$11.85 per share, valuing the company at A$8.02 billion (US$6.2 billion).
Photo: Reuters
Crown shares closed up 21 percent at A$11.97.
The Blackstone bid came after regulators refused to grant Crown a license to run its flagship casino in a gleaming 75-story tower that dominates Sydney’s waterfront owing to suspected links to organized crime.
Authorities acted on the recommendations of a public inquiry, which reported Crown had been “facilitating” money laundering through so-called “high-roller” gambling junkets linked to Chinese triads and other organized criminal groups.
The company and its largest shareholder, media scion James Packer, had been in the spotlight since media reports last year alleged that Crown casinos in Melbourne and Perth were used to launder profits from human trafficking, drugs, child sexual exploitation and terrorism.
State authorities have announced probes into the operations of Crown in the two cities.
Crown has also been suffering from a sharp drop in business caused by the COVID-19 pandemic
Crown’s chief executive officer and three long-time directors resigned in the wake of the Sydney inquiry, while executive chairman Helen Coonan accepted its findings as “warranted” and said steps were being taken to improve the company’s governance, compliance and culture.
The company last week announced that it was ceasing all political donations in Australia.
Blackstone already has a 9.99 percent stake in Crown, which it bought in April last year.
It also has made forays into the hotel and casino business and owns the Cosmopolitan resort and casino in Las Vegas, Nevada.
The takeover bid is subject to conditions including due diligence, debt financing and Crown board support.
If its takeover bid is successful, Blackstone would have to convince Australian regulators that it is a suitable entity to run casinos in the country.
Crown said the board was yet to form a view and “will now commence a process to assess the proposal.”
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