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    SGR   AU000000SGR6

THE STAR ENTERTAINMENT GROUP LIMITED

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Blackstone makes sweetened $6.2 bln play for Australia's Crown

11/18/2021 | 06:34pm EST

* Blackstone makes indicative offer of A$12.50 per share

* Approach matches that of rival casino group Star Entertainment

* Star withdrew its approach, and now faces regulatory probe

SYDNEY, Nov 19 (Reuters) - Investment giant Blackstone Group Inc made a $6.2 billion approach for troubled Australian casino firm Crown Resorts Ltd, sweetening an earlier offer as its main rival bidder is beset by regulatory problems.

The A$12.50-a-share proposal, disclosed by Crown on Friday, is the third from Blackstone and pushed Crown's shares 17% higher. The stock was still below Blackstone's indicative price, suggesting a degree of doubt that a deal will eventuate.

The revised offer puts Blackstone in the box seat to win control of Crown, which has faced devastating misconduct inquiries in every state it operates in, plus protracted COVID-19 lockdowns.

Rival bidder Star Entertainment Group Ltd, an Australian casino operator, has backed off its proposed deal citing regulatory uncertainty. It now faces its own misconduct allegations.

Crown still faces a public inquiry into governance and anti-money laundering compliance at its second-biggest earning casino, in Western Australia state, as well as a federal anti-money laundering investigation.

The company founded by billionaire James Packer has already acknowledged to regulators in New South Wales and Victoria that it failed to prevent criminal transactions.

The most consequential of the inquiries, which threatened to withdraw the gambling licence in Victoria behind three quarters of Crown's profit, ultimately cleared the company last month to keep operating under supervision.

Crown had favoured Star's buyout approach over an earlier Blackstone proposal, but Star's troubles threaten to derail any attempt to reopen talks and Blackstone's latest proposal matches Star's cash option.

"Crown is a high-quality, strategic asset," said Steve Johnson, chief investment officer at Forager Funds Management.

It was "not surprising private equity is back at the table" after it was allowed to keep its Victorian licence, but Blackstone's offer appeared to undervalue Crown, Johnson added.

Crown said its board would consider the latest Blackstone proposal although it had not yet formed a view on its merits.

A spokesperson for Blackstone, Crown's second biggest shareholder with 9.99% of its shares, confirmed the offer without commenting further.

A Star spokesperson said recently the company had withdrawn its Crown proposal but "as we have said consistently since that time, The Star remains open to exploring potential value enhancing opportunities with Crown".

($1 = 1.3740 Australian dollars) (Reporting by Byron Kaye in Sydney; Additional reporting by Sameer Manekar in Bengaluru; Editing by Vinay Dwivedi, Stephen Coates and Kim Coghill)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CROWN RESORTS LIMITED -0.60% 12.48 Delayed Quote.4.93%
THE STAR ENTERTAINMENT GROUP LIMITED -3.17% 3.36 Delayed Quote.-4.89%
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Sales 2022 1 454 M 1 045 M 1 045 M
Net income 2022 50,5 M 36,3 M 36,3 M
Net Debt 2022 1 057 M 760 M 760 M
P/E ratio 2022 65,9x
Yield 2022 0,73%
Capitalization 3 284 M 2 386 M 2 361 M
EV / Sales 2022 2,99x
EV / Sales 2023 2,05x
Nbr of Employees -
Free-Float 87,0%
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Matthias Michael Bekier Chief Executive Officer, MD & Executive Director
Harry Theodore Chief Financial Officer
John Anthony O'Neill Chairman
Geoff Hogg Group Executive-Operations
Katie Lahey Independent Non-Executive Director
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