Crown Resorts Ltd (ASX: CWN) share price is inching higher today after agreeing to private equity outfit Blackstone purchasing the company for $13.10 per share.
The deal values Crown Resorts at $8.9 billion and is still subject to shareholder and regulator approval.
It’s been a marathon effort by Blackstone, with its fourth attempt finally securing the Australian gambling powerhouse.
The buyer had previously made bids including $11.85, $12.35 and $12.50 per share.
The first bid was tabled just under one year ago.
Crown Resorts will join a growing list of companies exiting the ASX including Sydney Airport Holdings Pty Ltd (ASX: SYD) and Ausnet Services Ltd (ASX: AST).
Crown share price
Crown Resorts share price to finally reach $13.10
The Crown share price has been lukewarm to Blackstone’s takeover offers, inferring that the deal would never go through on multiple occasions.
It reached a low of $8.47 in July despite a $12.35 bid on the table just two months earlier.
After the $12.50 bid, the share price raced up to $11.54 before again sliding.
Even when the eventual $13.10 was tabled in January, the Crown share price lingered as low as $12 in the weeks beforehand.
But Blackstone looks to have hit its target and satisfied the Crown board that a private Crown Resorts is in its best interests.
The agreement with Blackstone also highlights the strength of the Crown brand and confidence in our future as we emerge from some challenging times, which is welcome news for our people, customers and stakeholders”
Crown Resorts share price still plagued by uncertainty
The Crown share price has traded below the takeovers offers due to two primary risks.
The first is will major shareholder James Packer, who owns 37% of the business, give his tick of approval?
While he did not formally comment, it would be unlikely that the board would go ahead with the deal without his support.
The second, and arguably more tricky, is regulatory approvals.
It’s been a treacherous 12 months for Crown, with respective state regulators rightly taking turns berating Crown for staggering governance failures and multiple wrongdoings.
Will a private Crown Resorts be better or worse in the regulator’s eyes?
New owners would be incentivised to work with regulators to get the best outcome.
But Blackstone is no charity. Crown Resorts will run to maximise profits – one of the key causes of past misdemeanours.
What next for the Crown Resorts share price?
A shareholder meeting will take place in March or April to formalise the deal.
Blackstone and Crown will also need to await the aforementioned regulatory approvals.
As each milestone is reached, the Crown share price will inch closer to the $13.10 price tag.
