HONG KONG, May 17 (Reuters Breakingviews) - Concise insights on global finance.
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)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
Disney misses the mark read more
Airbnb cleans up read more
Facebook digital currency read more
Ackman takes a slice of pie read more
Roche CEO’s vaccine candour may backfire read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.