Crown Resorts offers suitor Blackstone closer look at books

US bidder Blackstone finally has a foot in the door at Crown Resorts but will have to make a fourth offer to have a chance of winning over the scandal-plagued casino company’s new board. Crown on Thursday begrudgingly granted Blackstone limited access to its books in order that the private equity giant can revise its view of the target’s worth and make a new offer that “adequately reflects the value of Crown”. The move came as Crown rejected the $8.4 billion, $12.50-a-share cash offer lobbed by Blackstone last month, having also knocked back the $12.35 bid that followed Blackstone’s opening offer of $11.85 in March. Blackstone, which owns 10 per cent of Crown, declined comment on Thursday. However, the granting of limited due diligence is at least a step forward for the group, which had grown increasingly frustrated with former chairman Helen Coonan’s refusal to engage in takeover talks. Ms Coonan stepped down in August, to be replaced by Ziggy Switkowski., who formally took up his position only on Wednesday. The one-time Telstra boss heads a board which has been almost completed overhauled in the wake of damning findings by inquiries into Crown’s operations in NSW and Victoria. Crown’s decision to granted non-exclusive, “initial” due diligence will provide Blackstone encouragement that the new board is more amenable to discussing a buyout and follows reports that it has directly sounded out Crown’s 37 per cent shareholder, James Packer. However, Crown’s statement suggests the two companies are still some way apart on an mutually agreed value for a group which is expected to benefit from the lifting of COVID-19 social restrictions and the reopening of borders, but still carries regulatory risk. Some valuations have put Crown’s worth at as much as $16 a share, but more realistic and less bullish analysts have suggested Blackstone could win the company at around $13 a share. Crown said Thursday that after discussing Blackstone’s latest offer with advisers and taking account of feedback from shareholders and regulators, the board “is of the view that the proposal does not represent compelling value for Crown shareholders”. “However, the Crown board has offered Blackstone the opportunity to access non-public information to allow Blackstone to undertake initial due diligence inquiries on a non-exclusive basis so that it can formulate a revised proposal that adequately reflects the value of Crown,” it said. Crown shares were 9¢ better at $11.03 as at 11.55am, having traded under $10 before Blackstone’s emergence. A probe by the NSW Independent Liquor and Gaming Authority earlier this year found Crown unfit to hold a licence for the new Sydney casino at Barangaroo. A Victorian royal commission made a similar finding around the company’s Melbourne casino in October, but gave the company two years to address a litany of shortcomings, taking the unusual step of appointing a special manager to run the riverside complex. A royal commission into the company’s Perth operations is expected to report in March.