* Blackstone makes indicative offer of A$12.50 per share
* Approach matches that of rival casino group Star
* 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
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
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A Star spokesperson said recently the company had withdrawn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)