This entertainment complex is doing well and is now regarded as the premium venue in Sydney for hotels and restaurants. Selling out of Crown will be a bittersweet ending for Packer who used all his commercial and political influence to ensure construction of the 72-storey Barangaroo hotel, restaurant and apartment complex in Sydney. This opened the door for Blackstone, which paid $550 million or $8.15 a share, for Melco’s 9.9 per cent stake in Crown. The deal for 19.9 per cent was quashed after probity issues raised about Ho’s father Stanley. It was a two-step deal with 9.9 per cent up front and another 10 per cent to follow. The $13.10 a share offer is actually above the $13 a share valuation placed on the company by Packer in 2019 when he agreed to sell 19.99 per cent of the company to Lawrence Ho’s Melco Resorts and Entertainment. It is up there with Blackstone’s takeover of the QTS data centre business in mid-2021 for an enterprise value of $US10 billion. It is a measure of Blackstone’s confidence in the Crown gaming business that this deal is the largest privatisation of a public company by Blackstone in the Asian region. Crown is attractive to Blackstone because its properties are either freehold or held on long-term leases. Star has a lot on its plate including an inquiry into its handling of Chinese high-rollers and the completion of the $3.6 billion Queen’s wharf casino development in Brisbane.īlackstone’s offer has been orchestrated by Chris Tynan, who works on the property side of the private equity company. Oaktree last June offered to finance a $3 billion buyback of CPH’s stake in Crown with instruments convertible into 9.9 per cent of the company at $13 a share.Īnother outside possibility is that Star Entertainment will bring back its nil-premium merger proposal, which was put forward in May and withdrawn in July last year. A bid from a financial sponsor, such as global private equity firms Apollo and Oaktree, would make Blackstone work harder.Īpollo made a $4 billion bid for Tabcorp’s wagering and gaming business in May last year. The best outcome for shareholders, including Packer, would be an auction for Crown that pushes the takeover offer price even higher. But there is already a groundswell of support for the revised Blackstone bid including the backing of Perpetual, which owns 9 per cent. Switkowski and McCann were smart to leave the door open for competing offers. It was not until Switkowski took over as chair of Crown in December and Blackstone raised its offer to $12.50 a share that the company granted Blackstone due diligence. The offer now on the table, which is subject to a binding implementation agreement on terms and conditions acceptable to Crown, is the fourth to have been made by Blackstone.Ĭrown’s current chairman Ziggy Switkowski, chief executive Steve McCann and their advisers at UBS and Gresham have done a good job in forcing Blackstone to raise its offer by another 60¢ a share, or about $406 million. Packer’s explicit backing for the board’s recommendation – after the release of the final documentation – would fit with the much higher governance standards implemented at the company following damaging government inquiries into its affairs.ĭespite the governance failings under former Crown chairman Helen Coonan, it is fair to say she was right in holding out against Blackstone’s initial low-ball offer.
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