Blackstone Group Inc (NYSE: BX) expressed plans of buying Australia’s largest gaming and entertainment group, Crown Resorts Ltd (ASX: CWN), on Monday for £4.47 billion.
Blackstone remained almost flat on average in premarket trading on Monday. The stock is currently trading at a per-share price of £52.22 after recovering from a low of £26 per share in the last week of March 2020, when the impact of COVID-19 was at its peak. If you want to invest in the stock market online, you will need a reliable stockbroker – here is a comparison of the top few to make selection easier for you.
Blackstone’s offer translates to £6.62 per share
Blackstone’s proposed offer translates to £6.62 per share – a 20% premium on the price at which Crown Resorts closed the regular session on Friday. Portfolio Manager Nathan Bell of Intelligent Investor commented on the news on Monday and said:
“Blackstone couldn’t get away with a price like this if the casinos weren’t being affected by COVID and the management issues at the same time. It’s only an opening bid. It’s a messy situation, and offering to acquire a casino is a complex affair at the best of times due to all the regulation.”
As per Crown Resorts, its board is yet to decide on the proposal. The company also highlighted that its founder James Packer would receive roughly £1.62 billion if it signs an agreement with Blackstone. Packer currently has the largest 36% stake in Crown Resorts.
In separate news from the United States, PepsiCo jumped 1% in premarket trading on Monday as Barclays upgraded the stock from ‘equal weight’ to ‘overweight’.
Blackstone already has a 9.99% stake in Crown Resorts
Blackstone already has a 9.99% stake in Crown Resorts that makes it the second-largest shareholder of the company. Packer refrained from commenting on the news on Monday. Crown Resorts confirmed that it received a bid from Blackstone but refused to divulge further information at this stage.
Crown Resorts was stripped of its license last month to operate a new flagship casino located on Sydney’s waterfront on allegations of organised crime and money laundering. It has a license to operate in two other Australian states, where the country’s financial crimes agency has launched an inquiry as well.
Crown Resorts closed at a per-share price of £6.68 on Monday. In comparison, it had started the year at a much lower £5.53 per share.
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Wajeeh Khan
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