Gaming giant Crown Resorts is being targeted for a takeover after US investment fund Blackstone made an unsolicited offer.
The non-binding offer received on Sunday is priced at $11.85 cash per share, equating to about $8 billion.
Crown shares closed at $9.86 on Friday, valuing the group at $6.7 billion, but jumped as high as $11.75 this morning on the takeover news.
The offer represents a premium of 19 per cent to Crown's weighted average share price in the four weeks since it released its first-half results.
"The Crown board has not yet formed a view on the merits of the proposal," the company said in a statement.
Blackstone's indicative offer carries a number of conditions, including that it be recommended unanimously by the Crown board.
The US group also wants regulatory confirmation a future Blackstone-owned Crown is deemed a suitable person to hold the target's Sydney, Melbourne and Perth casino licences.
The recent Bergin inquiry concluded Crown was not suitable to hold the Sydney licence and royal commissions have subsequently been established in WA and Victoria to investigate its suitability in those states.
Blackstone already holds 9.99 per cent of Crown, which it bought from Melco Resorts & Entertainment in April last year for $8.15 per share.
Crown shares traded as high as $12.71 early last year, before an inquiry into its finances resumed, and the pandemic took hold.
ThinkMarkets analyst Carl Capolingua said the Blackstone bid looked cheap.
"It looks like a lowball offer," he said.
Mr Capolingua cited Las Vegas gambling giant Wynn Resorts' offer in 2019 of $10 billion.
Wynn called off talks, saying the preliminary talks had been revealed too early.
Mr Capolingua said the premium Blackstone was offering on shares may later be increased.
"You never put your best offer on the table first," he said.
Chief investment officer of stockbroker Shaw & Partners, Martin Crabb, said the bid could actually be a ploy to attract interest from casino operator Star Entertainment.
Star operates Sydney's only casino, and could be well-placed to take the licence from Crown for the city's second casino, which is yet to open at Barangaroo.
Mr Crabb said Blackstone may be trying to draw Star into a bidding war.
"The question is whether this bid is a ploy by Blackstone about flushing out a competing bid from Star, rather than Blackstone actually wanting to own the assets," he said.
A Star bid would be good news for Blackstone and other shareholders.
"Blackstone would get a high price for their shares," Mr Crabb said.
"So it's high-stakes game theory."
Mr Crabb also wondered whether the bid had been discussed with Crown's largest shareholder, James Packer, prior to it being tabled.
"You would imagine he is supportive," he said.
"You would want to make sure the largest shareholder will accept the bid. James Packer has made clear he wants to divest his holding."
Crown has appointd UBS as financial adviser and Allens as its legal adviser.
