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Blackstone Group Attempts to Take Over Australia’s Crown Resorts

Posted on March 24, 2021 | 9:53 am

Blackstone Group, a powerful American investment management company, has made an offer to take over Crown Resorts Limited, the biggest land-based casino operator in Australia.

The offer is worth 8.02 billion Australian dollars, which represents a price of 11.85 dollars for each share in Crown Resorts for 90.1% of shares the company does not currently own.

The price per share is around the value that Crown Resorts has seen last year, before the devastating effects of the novel coronavirus pandemic on its business. Moreover, the Australian company has been deeply affected by an investigation in New South Wales, which found that the firm was involved in money laundering.

Crown Resorts has confirmed that the proposal was received and is now being assessed by the company. However, the Australian firm insisted that there is no guarantee at this time that the offer will eventually convert into an actual transaction.

The Blackstone Group already owns 9.99% of Crown Resorts’ shares, a stake that was acquired from Melco Resorts & Entertainment Limited, the giant Asian gaming group, in April 2020. The price per share at that time was 8.15 dollars.

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A Company in Crisis

Crown Resorts is currently going through a very difficult period, as the effects of the novel coronavirus pandemic are coupled with the investigations from authorities into the company’s dealings.

In the first half of the 2020-20121 fiscal year, the company’s revenue went down by 62.1% compared to the same period of the previous year. In the six months to 31 December 2020, Crown Resorts had revenues of 581 million Australian dollars and recorded a loss of 120 million dollars.

Moreover, at the beginning of march the government of Western Australia ordered an investigation into the company’s suitability to hold a gambling license in the state.

The investigation in Western Australia will have its first hearing on March 24 and it follows the example of the states of Victoria and New South Wales, who have already put Crown Resort’s suitability to hold a gambling license into question.

The company operates Crown Perth in Western Australia, Crown Sydney in New South Wales and Crown Melbourne in Victoria. The Australian company also owns and operates Crown Aspinalls in London, along with various smaller online businesses like Betfair Australia, DGN Games, and Chill Gaming.

Source: “Blackstone rolls the dice with $6.2 billion move on Australia’s Crown Resorts“Reuters. March 21, 2021.

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