Australia's Crown spurns $6.5 billion Blackstone bid, says it undervalues firm

FILE PHOTO: Crown Resorts Ltd’s flagship tower nears completion at Barangaroo, Sydney, Australia, April 17, 2020. REUTERS/Stephen Coates/File Photo/File Photo/File Photo

(Reuters) – Australian casino operator Crown Resorts Ltd on Monday said U.S. private equity giant Blackstone Group Inc’s buyout offer undervalued its assets and would not be in the best interest of its shareholders.

Blackstone upped its all-cash offer for Crown to A$8.4 billion ($6.54 billion) last week as Star Entertainment Group emerged as a suitor for the company, currently steeped in regulatory scrutiny. Meanwhile Oaktree Capital offered to fund a A$3 billion buyback of founder James Packer’s stake in Crown.

In a separate statement, Crown said it had not yet come to a decision on Star’s proposal and was seeking more details from its casino rival to “better understand various preliminary matters”.

Interest in Crown, which has prized tourism and real estate assets across Australia, perked up after its share price took a hit due to COVID-19 related closures and a regulatory inquiry in New South Wales that led to its gambling licence to operate in the state being revoked.

However, Crown said it held highly prized assets and expected to slash its debt significantly in the future, leading its board to doubt the value of Blackstone’s offer.

Crown further cited uncertainty around regulatory approval conditions as a reason for rebuffing Blackstone’s approach.

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