Oaktree launches $3 billion bid to oust Packer from Crown

Oaktree launches $3 billion bid to oust Packer from Crown

Photo credit: Camilla Jansen

James Packer's shareholding in Crown Resorts (ASX: CWN) could be bought out if the casino's shareholders and board accept a $3 billion bid from US group Oaktree Capital Management.

Launched today, the unsolicited, preliminary and non-binding proposal from a company on behalf of funds managed and advised by Oaktree would see $3 billion in funding committed to CWN.

Those funds would be used to buy back some or all of the Crown shares that are held by Packer's Consolidated Press Holdings (CPH) on a selective basis. CPH currently has a shareholding of approximately 37 per cent in embattled casino and hotel operator.

Vulture fund Oaktree is known in Australia for its loan to Blue Sky Alternative Investments when it hit rock bottom, and for tussling with Wilson Asset Management (ASX: WAM) for control of Blue Sky assets.

According to CWN, any selective buy-back of Crown shares held by CPH would be subject to shareholder approval.

"The Crown board has not yet formed a view on the merits of the Oaktree proposal," says Crown.

"It will now commence a process to assess the Oaktree proposal."

Oaktree's bid comes nearly a month after American investment management Blackstone proposed an $8 billion takeover of the casino and resorts giant.

Blackstone is already a minority shareholder in Crown, currently holding a 9.99 per cent interest in the casino operator that it acquired from Melco Resorts for $8.15 per share in April 2020.

That deal is still subject to due diligence and a unanimous recommendation from the Crown board.

These bids come after a string of bad news for Crown, stemming from a scathing report commissioned by New South Wales' Independent Liquor & Gaming Authority (ILGA) that concluded the company was "unsuitable" to hold a casino licence in the state.

The Bergin Report was taken up by the ILGA, which officially determined Crown was not suitable to be given a casino licence for its new $2.2 billion Barangaroo tower in Sydney.

The report triggered a mass overhaul of the company's executive and board, including the stepping down of Crown CEO Ken Barton.

In addition, former AFL CEO Andrew Demetriou, three James Packer-linked executives, and businessman Harold Mitchell all resigned in the wake of the Bergin report.

The findings in NSW also sparked action from regulators in Victoria and Western Australia - the other two states Crown operates in.

Shares in CWN are up 0.38 per cent to $11.96 per share at 12.25pm AEST.

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