SYDNEY: Troubled Australian casino operator Crown Resorts rejected a takeover bid from US private equity giant Blackstone on Monday (May 17), saying the offer "undervalues" the gaming group.
The casino operator, which is subject to multiple inquiries into allegations of money laundering and ties to organised crime, said the bid of more than A$8 billion (US$6.2 billion) was not in the best interests of shareholders.
Crown said it was still studying a separate merger proposal by rival Australian casino operator Star Entertainment Group.
Blackstone launched its bid in March, just weeks after regulators refused to grant Crown a licence to run its flagship casino in a gleaming 75-storey Sydney tower, owing to suspected links to organised crime.
Authorities acted on the recommendations of a public inquiry, which reported Crown had been "facilitating" money laundering through so-called "high roller" gambling junkets linked to Chinese triads and other organised criminal groups.
Blackstone, which owns a 9.99 per cent stake in Crown, had already revised its offer from an initial A$11.85 per share to A$12.35.
But the Crown board told the Australian Securities Exchange (ASX) the bid still "undervalues" the company, while regulatory requirements "present an unacceptable level of regulatory uncertainty for Crown shareholders".
In a separate statement to the ASX, the board said it was still considering Star's proposal, which offers a combination of Star shares and cash to Crown shareholders.
The proposed merger would create a dominant A$12 billion casino group that would probably face close scrutiny from the Australian Competition and Consumer Commission to proceed.
Crown and its largest shareholder, media scion James Packer, have been in the spotlight over allegations that its casinos in Melbourne and Perth were used to launder the proceeds of crime.
Crown's then CEO and three long-time directors resigned in the wake of the Sydney inquiry, while executive chairman Helen Coonan accepted its findings as "warranted".
State authorities have also announced probes into the operations of Crown in the two cities.
The company last week said it would move toward cashless operations in a bid to stamp out money laundering, after an earlier announcement it would end all dealings with big-money junket operators.