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Capital Calls: Crown regains its swagger in Blackstone rebuff

2 minute read

Construction on Crown Towers Sydney (L), a casino and hotel complex, takes place on the harbour waterfront in Sydney, Australia, October 21, 2020. REUTERS/Loren Elliott/File Photo

HONG KONG, May 17 (Reuters Breakingviews) - Concise insights on global finance.

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CONFIDENCE TRICK. Australia’s Crown Resorts (CWN.AX) has regained its swagger. The distressed gaming group rebuffed a $6.5 billion bid from Blackstone (BX.N), arguing the private equity firm fails to account for multiple factors including a potential earnings revival, opening of a new property, and its plans to pay down some A$450 million in debt by the end of next month.

Such self-assurance is somewhat justified. Crown is mulling last week’s rival proposal read more from The Star Entertainment (SGR.AX), a share-based offer which allows the target’s owners to ride any recovery. That includes an option to pay cash for up to one quarter of the stock at A$12.50 per share versus Blackstone’s all-cash offer at A$12.35. Crown shares are trading at more than A$13.

It puts the ball back into Blackstone’s court. The 10% owner was dismissed without being given access to the books, according to a person familiar with the situation, giving it little fresh information to revise its offer. But Monday’s development underscores how Crown is slowly but surely fixing its own problems, including a governance and compliance crisis. (By Katrina Hamlin)

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