(Reuters) – Troubled Australian casino operator Crown Resorts Ltd said Monday it had received a conditional buyout proposal from US private equity giant Blackstone, pushing its shares 19% higher.
The indicative proposal comes as casinos and gambling operators around the world have seen values plummet as the coronavirus blocks battered earnings, putting them on the radar of cashed-in investment firms.
Crown has suffered more than most after years of regulatory investigation with allegations of money laundering and board failure at the company, leading to the loss of its gambling license for its new A $ 2.2 billion Sydney casino last month.
Since then, top executives, including the CEO, have resigned, paving the way for Crown to restore its reputation and regain its license with ex-Federal Communications Secretary and Chairman Helen Coonan at the helm of the overhaul.
Crown said Blackstone’s proposal was A $ 11.85 a share, a 20.2% premium to the company’s last closing price, and it valued at A $ 8.02 billion ($ 6.2 billion) .
Shares rose to A $ 11,750 after news of the proposal on Monday, their highest in a year. The stock fell nearly 20% in 2020 as the survey revealed major flaws in the company’s governance.
Blackstone currently holds a 10% stake in Crown, which it bought last April from Melco Resorts & Entertainment in Macau for just A $ 8.15 a share, and is the second-largest holder after billionaire founder James Packer.
The company’s board had not yet taken a position on the offer, which was subject to conditions including due diligence, arranging debt financing and Blackstone receiving gambling approvals to allow it to operate Crown’s licenses in Sydney, Melbourne and Perth, it said. company in a statement.
Blackstone recently acquired the Bellagio in Las Vegas for $ 4.25 billion, and also owns a casino resort called “The Cosmopolitan” in Las Vegas and Spanish arcades operator Cirsa.
($ 1 = 1.2967 Australian dollars)
Reporting by Rashmi Ashok in Bengaluru; Edited by Diane Craft and Stephen Coates