Huntley Mitchell 18 May 2021
Crown Resorts has shifted its full attention to The Star Entertainment Group’s big merger offer, after giving Blackstone’s acquisition proposal the flick.
The private equity firm submitted a revised proposal to acquire Crown by way of a scheme of arrangement at an indicative price of $12.35 cash per share – an increase of four per cent compared to the previous indicative offer price.
However, Crown Resorts announced yesterday that the company’s board has unanimously concluded that Blackstone’s revised proposal “undervalues Crown and is not in the best interests of Crown’s shareholders”.
“In coming to this conclusion, the board considered a range of scenarios given the regulatory inquiries in relation to Crown which are underway.
By Mark Woodruff
Guide:
The FNArena database tabulates the views of seven major Australian and international stock brokers: Citi, Credit Suisse, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS.
For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.
Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.
Summary
Total Upgrades: 10
Net Ratings Breakdown: Buy 54.77%; Hold 38.50%; Sell 6.73%
For the week ending Friday 14 May, there were ten upgrades and eight downgrades to ASX-listed companies by brokers in the FNArena database.
Article content
SYDNEY Australia’s troubled casino operator Crown Resorts on Monday rejected an all-cash $6.5 billion buyout proposal from Blackstone Group as too low, but said it was seeking more information from rival suitor Star Entertainment Group.
The rebuff comes as Crown, which has prized tourism and real estate assets in major Australian cities, faces intense regulatory scrutiny and is grappling with a slump in profits due to the coronavirus pandemic.
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Crown said while it had considered a range of scenarios given regulatory enquiries, the U.S. private equity giant’s offer of A$12.35 per share or A$8.4 billion did not take into account the full value of its assets, a potential jump in earnings once the pandemic eases and plans to pay down a significant amount of debt.