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Crown says he will likely back Blackstone’s enhanced $ 6.5 billion takeover bid

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SYDNEY – Australia’s largest casino operator, Crown Resorts Ltd, said on Thursday its board of directors was likely to back an improved Australian $ 8.87 billion ($ 6.46 billion) buyout proposal US private equity firm Blackstone Inc, unless a higher bid appears.

Crown received a fourth non-binding offer of AU $ 13.10 per share, after rejecting Blackstone’s previous offer of AU $ 12.50 as unconvincing https://www.reuters.com/business / australias-crown-says-blackstones-62-bln- unconvincing buyout offer-2021-12-01 / #: ~: text = N)% 20% 246.2% 20billion% 20buyout% 20offer, surveys% 20for% 20a% 20revised% 20proposition. “

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A person with first-hand knowledge of the matter told Reuters that the nearly 5% price hike agreed to after the initial due diligence was backed by large investors, including founder James Packer, who collectively own around 60% of the shares. Crown actions.

There are hopes of signing a deal by the end of January, said the person, who was not authorized to speak publicly on the matter and therefore declined to be identified.

Investment manager Perpetual, Crown’s third-largest shareholder with a 9.2% stake, said it supported the revised proposal in the absence of a better offer.

Packer, who owns 37%, did not respond to a request for comment. Blackstone, who owns 9.9%, declined to comment.

The deal, which requires approval from casino regulators in three Australian states and a shareholder vote, could be finalized by the end of June, a second person familiar with the matter said.

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Crown shares jumped 9% to A $ 12.68 on Thursday morning, their highest price since June 4, but still well below Blackstone’s bid, indicating market doubt about an offer. competitor.

The revised offer puts Blackstone in the chair to gain control of Crown, which has faced devastating malpractice investigations https://www.reuters.com/business/australias-crown-branded-disgraceful-gets-two -years-fix-melbourne -casino-2021-10-25 in every state in which it operates, while extended COVID-19 lockdowns have resulted in fewer visitors.

Following the latest offer, the casino operator has stated https://events.miraqle.com/DownloadFile.axd?file=/Report/ComNews/20220113/02475175.pdf that it will engage with Blackstone on a non-exclusive and would give the investment manager the possibility of finalizing the due diligence.

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Crown said if Blackstone makes a firm offer of at least A $ 13.10 per share and if there are no superior bids, its board of directors intends to recommend shareholders to vote. in favor of the proposal.

“It is likely that a deal will be reached,” said Steve Johnson, chief investment officer at Forager Funds Management, which owns shares of Crown.

“The increase in the offer price is a welcome step in the right direction and we support the board of directors continuing to push for an appropriate firm offer for shareholders,” he said.

After an investigation in July last year, Crown was asked to withdraw its gaming license for its main Melbourne resort https://www.reuters.com/business/australia-inquiry-urged-strip- crown-resorts-license-main-casino- 2021-07-20, Australia’s second-largest casino operator Star Entertainment Group Ltd has withdrawn https://www.reuters.com/business/australias-star- entertainment-abandons-66-bln-bid-crown-resorts-2021-07 -22 / #: ~: text = July% 2023% 20 (Reuters)% 20-% 20Australian, license% 2C% 20sending% 20its% 20shares% 20 lowering an A $ 9 billion buyout proposal, mostly scripts.

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Star, subject to a separate regulatory investigation into its anti-money laundering actions, has left open the possibility of entering the fray. In an emailed response to Reuters on Thursday, he reiterated that he “remains open to exploring potential value improvement opportunities with Crown.”

Crown remains open to talks with Star and expects his counterpart to have more leeway once the regulatory investigation is completed, a third person familiar with the matter said.

Public hearings on Star are scheduled to begin in March. ($ 1 = A $ 1.3729) (Reporting by Scott Murdoch and Sameer Manekar in Bengaluru; Additional reporting by Savyata Mishra in Bengaluru; Writing by Jamie Freed; Editing by Karishma Singh and Christopher Cushing)

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