Star launches Crown casino merger bid as Blackstone ups the ante in takeover offer

The Australian gaming giant Crown Resorts has a new suitor after global asset management firms Blackstone and Oaktree have earlier put up takeover offers. Rival casino operator Star Entertainment Group has proposed a A$12bn merger bid, offering a zero-premium share exchange ratio of 2.68 Star shares for each Crown share or alternatively, A$12.50 cash per Crown share, capped at 25% of Crown’s total shares on issue.

Star said its offer would create an Australian gaming and hospitality giant with a market value of A$12 billion, adding that merging the two groups would deliver A$150 million to A$200 million in cost savings a year, which would translate to about A$2 billion in equity value for shareholders in a combined group.

The proposed merger, however, will need approval from the Australian Competition and Consumer Commission, which will hold a public review on the proposal if Crown accepts the deal.

In a separate development, Blackstone has raised its offer to $12.35 cash per share, up from $11.85 cash per share previously. The private equity giant lobbed an A$8 billion bid for Crown in March, while a third suitor, Oaktree Capital, offered A$3 billion for James Packer’s 37% stake in the company last month.

As rivals bid for Crown, the casino operator has been cornered by the Australian gaming regulator. The company was found unfit to run its new Sydney casino by a government inquiry back in February following years of money laundering at properties in Perth and Melbourne.