By Dhirendra Tripathi
Investing.com – Crown Resorts stock (ASX:CWNHB) closed 2% higher in Sydney trading Monday after its board endorsed a $6.3-billion offer from Blackstone (NYSE:BX), paving the way for a new owner at the scandal-hit casino operator.
The private equity giant will pay in cash around $9.3 per share (A$13.10), valuing Crown at nearly $8.9 billion. The price is 11% higher than the initial offer from Blackstone almost a year ago, Crown said in a release.
The deal provides billionaire James Packer an exit from the Australian firm 15 years after he established it to diversify the family business away from its media empire.
Packer owns 37% in the firm and Blackstone needs vote of 75% of the shareholders to clinch the deal. That shareholder meeting should happen in the June quarter, Reuters said. Blackstone already owns 10% of the firm.
Authorities had last year found that Crown had knowingly dealt with criminal organizations and concealed that relationship from them. The gambling license for Crown's flagship casino skyscraper in Sydney remains suspended, more than a year after it was due to open. Crown's main earner, its Melbourne casino, must operate with a government-appointed supervisor for two years, Reuters said.
Last October, Crown settled a class-action lawsuit that alleged it failed to inform shareholders of a marketing campaign in China that led to a sharp fall in shares when staff were detained in 2016 for illegally promoting gambling. The company paid over $94 million to settle the case in China without admission of guilt.