SGRCD Star Entertainment Group Limited

   By Mike Cherney 
 

SYDNEY--Australian casino operator Crown Resorts Ltd. rejected a takeover offer from U.S. private-equity firm Blackstone Group Inc., saying the proposal undervalued the company and presented too much regulatory uncertainty.

Separately, Crown said it had asked rival Star Entertainment Group Ltd. for more information on Star's proposal to merge with Crown. Crown added its board had not yet decided whether to pursue Star's offer.

Blackstone most recently offered 12.35 Australian dollars (US$9.61) per share for Crown, increasing an earlier offer of A$11.85 per share.

But Crown, which is facing multiple investigations from Australian authorities into its business practices, said there is significant uncertainty as to the timing and outcome of those regulatory processes. Crown said that Blackstone's offer, which included regulatory approval conditions, was therefore too risky.

Crown also raised doubts on whether Blackstone's offer fully accounted for its land, hotel and casino assets, the recent investment in a new Sydney casino and the reduction in debt expected to occur from the sale of apartments in its new Sydney building. Crown had concerns about the timing of Blackstone's proposal, given the Covid-19 pandemic has impacted its recent financial performance.

Crown also said it was worried about the time frame involved in implementing Blackstone's proposal and the low takeover premium offered.

Star's merger proposal offered a combination of stock and cash for Crown shares. Star said that its proposal valued Crown at more than A$14 per share, but that assumes various merger benefits like cost savings are included.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

May 16, 2021 20:04 ET (00:04 GMT)

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