Blackstone offer 'undervalues' us: Crown

·2-min read

Crown Resorts has knocked back US private equity firm Blackstone's takeover offer, saying the proposal "undervalues" Crown and wouldn't be in shareholders' best interests.

But Crown is still mulling a more recent merger proposal from rival gambling company Star.

Crown made the announcement to the ASX on Monday.

The updates follow reports institutional shareholders wanted Crown to move faster and more openly on a potential sale.

Blackstone upped its offer to $8.2 billion, or $12.35 a share, this month but it's not enough for Crown.

The Crown board unanimously concluded the revised proposal was too low and its conditions too uncertain.

"The Board is committed to maximising value for all Crown shareholders and will carefully consider any acquisition proposal that is consistent with this objective," the announcement said.

The Blackstone offer is predicated on regulatory approval being granted, which Crown says presents an "unacceptable level" of regulatory uncertainty for shareholders.

The board also considered the strategic value of Crown's assets, including the $2.2 billion Crown Sydney project which is yet to provide a "meaningful contribution" to Crown's earnings.

The NSW regulator said last week Crown Sydney will most likely be opening its doors to gamblers before October.

Crown also says its earnings have been deflated due to the COVID-19 pandemic. It's yet to receive proceeds from the sale of Crown Sydney apartments as well.

And it says the Blackstone offer could take too long to implement.

As for Star, the Crown board "has not yet formed a view on the merits" of its proposal.

It's requested more information from Star.

"Crown shareholders do not need to take any action in relation to the merger proposal at this stage," the ASX announcement says.

"There is no certainty that the merger proposal will result in a transaction."