Australia’s Star makes US$7bil play for Crown


Buyout offer: The move reflects the intense interest in a company with prized tourism and real estate assets on both Australian coasts. — Bloomberg

SYDNEY: Australia’s No. 2 casino operator Star Entertainment Group has proposed a A$9bil (US$7bil or RM29bil) buyout of larger rival Crown Resorts Ltd, vying with two private equity giants for control of the troubled target.

Star said it was proposing to give 2.68 of its shares for each share of Crown, and estimated Star shares would be worth A$5 (RM16.14) each if the deal went ahead – up from A$3.91 (RM12.63) at their last close – implying a A$9bil (RM29bil) sale price.

Just minutes earlier, buyout specialist Blackstone Group upped an all-cash indicative offer to A$8.4bil, Crown said.

Another private equity player, Oaktree Capital Group, has put a proposal to bankroll a A$3bil (RM9.7bil) buyback of Crown’s founder’s stake.

Star’s move reflects the intense interest in a company with prized tourism and real estate assets on both Australian coasts at a time when its profits and share price have been hit by coronavirus-related border closures and regulatory headaches.

Crown faces the start of one of three state inquiries into its operations later after another state found it enabled money laundering on its premises, knowingly dealt with tour operators linked to organised crime and disregarded the safety of staff in China who were jailed in 2016 for breaching its gambling ban.

“With a portfolio of world-class properties across four states in Australia’s most attractive and populated catchment areas and tourism hubs, the combined group would be a compelling investment proposition and one of the largest and most attractive integrated resort operators in the Asia-Pacific region, ” Star chairman John O’Neill said in a statement.Crown, which is 37% owned by its billionaire founder James Packer, said it was assessing the Star approach and the revised Blackstone offer.

A Blackstone representative was not immediately available for comment, while an Oaktree spokesperson declined to comment.

Star has a Sydney waterfront casino near Crown’s new resort tower that it opened in December without permission to offer gambling.

Star also has casino assets in tourist-popular Queensland state, where Crown does not have a casino.

Star estimated its proposal could generate cost synergies of between A$150mil (RM484mil) and A$200mil (RM645mil) a year.

Any deal would likely need approval from Australia’s competition authorities. — Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

SCIB JV accepts RM138.5mil contract for Terengganu roadworks
T7 Global to provide ROV underwater services for 10 platforms
AIA Malaysia taking up minority stake in TNG Digital
FBM KLCI falls on new Covid record
SME Corp, MIDF launch SME revitalisation financing plan
Chinese tutoring firms extend plunge as Beijing cracks down
MyCC monitoring food delivery platform firms
Ringgit opens marginally as Covid cases surge
Foreign funds' net selling slows
Bitcoin surges toward US$40,000 level

Stories You'll Enjoy


Vouchers