Australian casino giant Crown Resorts Co., Ltd. announced on March 22, 2021 that it had received US private equity giant Blackstone conditional acquisition agreement, Blackstone Group plans to acquire all the shares of Crown Group at a price of 11.85 Australian dollars per share, making the value of the Crown Group at about 8.02 billion Australian dollars.
In April 2020, the Blackstone Group acquired shares of Crown Group from Melco Resorts & Entertainment Limited at a price of A$8.15 per share. As of now, the Blackstone Group holds 9.99% of the shares of Crown Group.
The Blackstone Group put forward a number of conditions for the acquisition, including due diligence, restructure of debt, unanimous recommendations of the Crown board of directors, and commitments of all Crown directors to vote in favor of the acquisition proposal, and signing of binding terms and conditions containing various terms and conditions.
The Blackstone Group’s proposed acquisition of Crown at a price of A$11.85 per share is a 19% premium to the average share price of the Crown Group since the release of the 2021 semi-annual report on February 18. However, it is a premium of 20.18% if compared with the closing price of A$9.86 per share on March 19, 2021. The board of directors will evaluate the value and conditions of the proposal thoroughly.
The global casino gaming industry, hotel and tourism industry have suffered major blows ever since the COVID-19 pandemic erupted. In addition, the loss of the Sydney casino license and the replacement of senior management have made the troubled Crown Group worse, and it has also become the focus of cash-rich investment companies.
According to Crown Group’s previous financial report, for the six months ended December 31, 2020, Crown Group’s operating income was A$581 million, a year-on-year decrease of 62.1%; net loss was A$120.9 million, and net profit was down 155.4% year-on-year.
According to a Reuters report, the Blackstone Group not only aims at the acquisition of Crown Group, it recently acquired the Bellagio in Las Vegas for US$4.25 billion, and owns a company called “Metropolis” in Las Vegas. The casino also owns the Spanish gaming operator Cirsa.
However, the news of the acquisition seems to make investors optimistic about the prospect of the group. The share price of the Crown Group traded higher on March 22 in the Australian Securities Exchange. As of the close, it rose 17.849% to 11.62 Australian dollars per share, with a total market value of approximately 6.67 billion Australian dollars.