Crown Resorts’ board has called on shareholders to support Blackstone in its proposed purchase of the company. The board noted that shareholders would be able to avoid the “uncertainties and risks” associated with the business by selling.
These comments were made in the scheme document that was released before Crown’s shareholders meeting, where they will vote on this deal. This document includes a list of possible reasons for shareholders to support or oppose the deal.
Crown’s multiples are comparable to those of other market players.
The Blackstone bid prices Crown at AUS$13.10 (PS7.48/EUR8.81/$9.84) per Crown share. The board stated in the document that this transaction will have a revenue multiplier similar to other casinos across Australia and US. This would be higher than the casinos of New Zealand, Macau and Singapore.
It goes on to say that shareholders can invest with certainty in a scheme where they are paid AUS$13.10 for each share. This eliminates the “uncertainties and risks” associated with ongoing investments of Crown assets or business.
The report continued, “In the event that the plan does not go ahead, Crown Shareholders’ ability to realize future dividends and prices will always be subject to uncertainty and risk.”
The business was recently scrutinized, and reviews conducted in New South Wales (NSW), Victoria, and Western Australia found Crown to be “unsuitable”.
All reviews found money laundering evidence and connections to organized crime junkets at Crown’s resorts. They also questioned Crown’s management.
All three investigations into Crown concluded that the casino operator could still operate its business if certain changes were made.
The document gives several reasons why investors may want to vote against this scheme. For example, they might disagree with an independent expert’s opinion or wish to participate in future Crown Financial decisions.
To pass the plan, it must receive 75% of votes.
Blackstone has received approvals for its Crown Resorts acquisition yesterday (29th March).
Crown noted also that Crown’s shareholders were satisfied with the conclusion of an independent expert that this acquisition was fair and beneficial to them.
Grant Samuel and Associates Pty Limited prepared the expert report. It found that in a competitive open environment, the bid for acquisition was the most attractive.
Blackstone first submitted a proposal to acquire Crown last year, at a bid of AUS$8.02bn (PS4.47bn/EUR5.21bn/US$6.19bn).
Crown’s board unanimously approved this bid. Crown’s Board unanimously approved this.
