Crown Bidding War Intensifies as Star Offers Casino Merger

(Bloomberg) -- Star Entertainment Group Ltd. offered to merge with Australian casino rival Crown Resorts Ltd. in an all-stock deal, setting up a bidding war with rival suitor Blackstone Group Inc.

Star said Monday it’s offering 2.68 of its shares for each Crown share, implying a potential value of A$14 per share. A sweetened A$12.35 per share cash bid from Blackstone was announced just minutes earlier.

Crown said it’s assessing both proposals.

Bidders are circling Crown while it’s cornered by regulatory inquiries, after it was found unfit to run its new Sydney casino in February following years of money laundering at other properties. It also faces probes into its suitability to operate its casinos in Melbourne and Perth.

The cost benefits of a potential merger of Crown and Star had long been speculated by analysts.

Blackstone Sweetens Crown Resorts Takeover Offer 4.2%

Star’s bid also includes a cash alternative of A$12.50 per share for as much as 25% of Crown’s issued shares.

Star, best known for its Sydney casino, said its proposal can deliver between A$150 million and A$200 million in annual cost savings. Star also plans a sale and leaseback of the combined group’s property portfolio.

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