Blackstone to wear the Crown as casino board backs takeover deal

The board of gambling and resorts giant Crown Resorts (ASX: CWN) has unanimously backed an $8.9 billion takeover offer from US investment manager Blackstone, with the pair entering into a scheme implementation deal today.

The agreement will see Blackstone acquire all CWN shares at a price of $13.10 cash per share, and if approved by shareholders means the deal will complete sometime in the second quarter of calendar year 2022.

“The board has fully considered the Blackstone transaction and unanimously recommends the proposal, subject to customary conditions such as an independent expert concluding the transaction is in the best interests of Crown shareholders and there being no superior proposal,” CWN chairman Ziggy Switkowski said.

“When considering any proposal, the Crown board has consistently stated it is committed to maximising value for Crown shareholders. The Crown board and management have made good progress in addressing a number of significant challenges and issues emerging from the COVID-19 pandemic and various regulatory processes.

“Nevertheless, uncertainty remains and having regard to those circumstances and the underlying value of Crown we believe the Blackstone transaction represents an attractive outcome for shareholders. The all-cash offer provides shareholders with certainty of value.”

Acceptance from the CWN board brings to a close a nearly year-long negotiation process between the resorts company and Blackstone, with the investment manager’s final bid 11 per cent higher than the initial offer it put forward.

As such, the Crown board says it is now appropriate the Blackstone transaction is put to shareholders for their consideration.

“The announcement today represents a compelling offer for Crown’s shareholders to consider," Crown managing director and CEO Steve McCann said.

“The price appropriately reflects the value of Crown's world-class assets and global reputation for premium service and experiences.

“The agreement with Blackstone also highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders.”

In addition to shareholder approval, the deal requires approval from the Foreign Investment Review Board (FIRB) and each gaming regulatory authority.

However, Crown says ‘no gaming regulatory event or material adverse change occurring’ is a condition for implementation of the scheme, which could prove sticky depending on the results of the Perth Casino Royal Commission.

The final report from the Royal Commission is expected to be handed down next month, following closing submissions delivered in late-January.

Shareholders will get the opportunity to vote on the proposal in the second quarter of calendar year 2022.