Australian gaming and hospitality giant, Crown Resorts, has received an amended acquisition bid from American private equity group, Oaktree Capital Management. The proposition, estimated at AUD$3.1 billion (US$2.39 billion), comprises a dual-pronged financing structure.
The initial component is a term credit of AUD$2 billion, while the second is a AUD$1.1 billion facility convertible into fresh Crown Resorts stock. This credit line would carry a seven-year duration and an annual interest rate of 6% for the initial two years, escalating to 6.5% per annum from the third year until its termination. The volume of new Crown Resorts shares issuable to Oaktree Capital would be restricted to roughly 10% of Crown Resorts’ overall issued shares.
This modified proposal follows Oaktree’s original unsolicited, non-binding indicative overture in April 2021 to procure all or a portion of Crown Resorts for AUD$12.00 in cash per share.
Despite encountering examination from a Royal Commission investigation into its business practices, Crown Resorts has garnered substantial attention from prospective purchasers. In May 2021, Star Entertainment Group, a rival in the Australian casino sector, presented a merger proposition offering 2.68 Star Entertainment Group shares for each Crown Resorts share.
The Crown Resorts board has yet to reach a definitive resolution on the merit of Oaktree’s revised proposal.
On the 22nd of March, Blackstone attempted to acquire Crown Resorts, proposing a cash purchase of all stock at $11.85 per share. Crown, nevertheless, opted to refuse the proposition.