19/04/2021 - 08:30

Oaktree lobs competing Crown proposal

19/04/2021 - 08:30

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Crown Resorts has received a $3 billion funding proposal from a private equity group that would allow it to buy out major shareholder James Packer.

Crown has received a $3 billion funding proposal from a US asset management group. Photo: Attila Csaszar

Crown Resorts has received a $3 billion funding proposal from a private equity group that would allow it to buy out major shareholder James Packer.

The unsolicited approach was made by Oaktree Capital Management, a US-based private equity group specialising in alternative investment strategies.

It has offered to provide a funding commitment of up to $3 billion to Crown.

Crown said the funding would be via a “structured instrument”.

No details were provided but this is likely to mean Oaktree would retain the rights to convert its loan into equity.  

If Crown takes up the offer, the gaming company said it would use the funds to buy back some or all of the shares held by Consolidated Press Holdings.

Mr Packer’s CPH holds 37 per cent of Crown.

"The Crown board has not yet formed a view on the merits of the Oaktree proposal at this stage," the group said in a statement on Monday.

"It will now commence a process to assess the Oaktree proposal."

If it did go ahead, it would be subject to Crown shareholder approval, with no votes being cast by CPH in its favour.

"There is no certainty that the Oaktree proposal will result in a transaction," Crown said.

The proposal comes as the Crown board continues to consider an $8 billion takeover offer from another US-based private equity group, Blackstone.

Blackstone's unsolicited, non-binding offer, made in March comprises $11.85 cash per share.

Blackstone already owns about 10 per cent of the group.

The new proposal comes just days after CPH finalised an agreement with NSW’s gaming regulator, under which CPH has effectively agreed it would not use its shareholding to exercise special influence at Crown.

The Bergin inquiry found that Crown had been given special access to information not shared with other investors in the company.

It found this contributed to the major governance problems at the company.

Crown is currently the subject of royal commissions in both WA and Victoria, where it has operating casinos.

Crown shares closed slightly higher today at $11.98.

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