Blackstone rolls the dice with $6.2 billion move on Australia’s Crown Resorts
Byron Kaye, Rashmi Ashok, 22 March 2021
Crown shares leapt more than 20% after it disclosed the informal offer on Monday, passing Blackstone’s indicative price of A$11.85 as investors wagered a bigger payment could be in the offing from the world’s No. 1 private equity firm or another suitor.
“It’s nice to get a bid, and now it’s about price discovery,” said John Ayoub, a portfolio manager at Wilson Asset Management, which has Crown shares.
“These stocks are trading at trough earnings and I wouldn’t be surprised to see further activity in the sector.”
If Blackstone’s takeover were to succeed, it would round out a portfolio of gambling-related assets from Las Vegas to Spain with resorts in three Australian cities.
But it would get a company in crisis after Crown lost its licence to operate a flagship new casino on Sydney’s waterfront last month amid allegations of money laundering and links to organised crime.
It also faces inquiries in the other two Australian states where Crown is licensed to operate.
Australia’s financial crimes agency meanwhile is investigating Crown over money-laundering allegations, and the company faces two civil lawsuits accusing it of failing to disclose risks which led to share price declines.
Blackstone’s indicative offer was short of the stock’s trading levels before concerns about the coronavirus caused market gyrations in early 2020.Bell
