US fund Oaktree Capital Management has increased its proposed investment in Crown Resorts (ASX: CWN) by $100 million today, with the funds to be used to buy-back shares held by James Packer's Consolidated Press Holdings (CPH) if the deal is approved.
As announced in April, Oaktree's proposal is a structured investment designed to buy CPH out of Crown. The Packer-controlled entity currently has a shareholding of approximately 37 per cent in the casino and hotel operator.
Now the vulture fund, known in Australia for its loan to Blue Sky Alternative Investments when it hit rock bottom, has revised its proposal to total $3.1 billion, consisting of a $2 billion private loan and a $1.1 billion loan convertible into new shares to be issued by Crown.
"Oaktree proposes that the facility would be used to fund a selective buy back of CPH's shareholding in Crown," says Crown.
"The Crown Board has not yet formed a view on the merits of the Revised Oaktree Proposal."
However the US fund has some stiff competition in the form of The Star Entertainment Group (ASX: SGR) which launched a $12 billion bid to merge with Crown Resorts just a month after the CPH buyout offer was put on the table.
Star Entertainment has offered 2.68 of its own shares for every Crown share, and a cash alternative of $12.50 per Crown share for up to 25 per cent of the company's issued capital.
In its proposal, Star estimates the merger would result in indicative cost synergies of between $150 million and $200 million per annum.
Another competing bid from US investment management company Blackstone is no longer a threat to Oaktree after CWN rejected the $8 billion proposal, claiming it undervalued the company.
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