{"id":180773,"date":"2021-07-23T07:40:14","date_gmt":"2021-07-23T14:40:14","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=180773"},"modified":"2021-07-23T09:25:23","modified_gmt":"2021-07-23T16:25:23","slug":"star-entertainment-rescinds-6-6b-crown-resorts-buyout-proposal","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/star-entertainment-rescinds-6-6b-crown-resorts-buyout-proposal\/","title":{"rendered":"Star Entertainment Rescinds $6.6B Crown Offer, Cites Melbourne Inquiry"},"content":{"rendered":"

Star Entertainment has withdrawn its AU$9 billion (US$6.64 billion) buyout offer of rival Australian casino operator Crown Resorts.<\/p>\n

\"Star
It’s been a turbulent few years for Crown Resorts founder James Packer, seen here last year testifying remotely before an inquiry in New South Wales. Star Entertainment announced today it is no longer offering to buy Packer’s troubled Crown casino empire. (Image: NSW)<\/figcaption><\/figure>\n

Star Entertainment, the smaller of the two Aussie casino groups, cited the growing assumption in Victoria that Crown will lose its casino license for its Melbourne integrated resort. This week, legal counsel assisting Victoria’s royal commission investigating the suitability of Crown to continue conducting casino operations in the state recommended that the company be revoked of its gaming privileges<\/a>.\u00a0<\/span><\/p>\n

Issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the license to operate its Melbourne casino or the conditions under which its license is retained,” Star said in a statement announcing its withdrawal.<\/p><\/blockquote>\n

“We continue to believe substantial benefits could be unlocked by a merger. However, the uncertainty surrounding Crown is such that The Star is unable to continue at the present time with its Proposal,” the company added. “Star \u2026 today informed Crown Resorts Limited that it has withdrawn its conditional, non-binding, indicative proposal.”\u00a0<\/span><\/p>\n

Crown Failures<\/b><\/h2>\n

Star Entertainment owns and operates The Star Sydney in New South Wales (NSW) and two integrated resorts in Queensland — The Star Gold Coast in Broadbeach and The Treasury Casino in Brisbane.<\/p>\n

Crown’s Aussie portfolio includes Crown Melbourne, Crown Perth, and Crown Sydney. Crown Sydney, the company’s newest property that it invested more than $1.6 billion to construct, has led to Crown Resorts’ demise.\u00a0<\/span><\/p>\n

\n

An independent inquiry in NSW concluded that Crown did little to thwart criminal organizations from infiltrating its VIP business at its Melbourne and Perth casinos. The probe also found that billionaire James Packer, who founded Crown Resorts and maintains a 37 percent ownership stake, was allowed to have unreasonable control and influence over the organization.<\/p>\n<\/div>\n

Crown was also accused of not protecting its staff. In 2016, China arrested and jailed 16 Crown Resorts employees on allegations that they were illegally promoting gambling to mainland people. The incident led to Melco Crown Entertainment, founded in 2004 by Packer and Hong Kong billionaire Lawrence Ho, splitting the organization. Ho formed Melco Resorts, while Crown become Crown Resorts.<\/p>\n

Ho later said Crown was reckless in its marketing throughout Asia, specifically China. \u00a0<\/span><\/p>\n

“You had casino salespeople running around offering credit, it wasn’t discreet,” Ho told the Australian Financial Times <\/i>in 2017. “That’s what caught their [China’s] attention. ‘What the hell, you’re deliberately spitting on our faces.'”<\/p>\n

Uncertainty Ahead<\/b><\/h2>\n

The Hon. Ray Finkelstein, a former judge of the Federal Court of Australia, is heading the casino suitability review in Victoria. He will ultimately make the ruling whether Crown Resorts should lose its Melbourne casino license.<\/p>\n

Crown Melbourne is the company’s greatest asset. Losing its casino, which generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of AU$589.5 million (US$440.3 million) in 2019, would be a devastating blow that would greatly threaten the company’s ability to survive.\u00a0<\/span><\/p>\n

\n

Crown previously dismissed a takeover offer from US-based private equity giant Blackstone. With Star now out, its options are slim.\u00a0Oaktree Capital, another US global asset management firm, remains the sole bidder. But the company doesn’t want the entire Crown casino portfolio, but instead is willing to acquire Packer’s stake<\/a>.\u00a0<\/span><\/p>\n<\/div>\n

Oaktree’s offer of AU$3 billion (US$2.21 billion) for Packer’s 37 percent stake remains on the table. That would at least satisfy some of the inquiry concerns regarding Packer’s influence on the group.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Star Entertainment has withdrawn its AU$9 billion (US$6.64 billion) buyout offer of rival Australian casino operator Crown Resorts. Star Entertainment, the smaller of the two Aussie casino groups, cited the growing assumption in Victoria that Crown will lose its casino license for its Melbourne integrated resort. This week, legal counsel assisting Victoria’s royal commission investigating […]<\/p>\n","protected":false},"author":25,"featured_media":180777,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,21],"tags":[],"acf":[],"yoast_head":"\nStar Entertainment Rescinds $6.6B Crown Resorts Buyout Proposal<\/title>\n<meta name=\"description\" content=\"Star Entertainment has withdrawn its $6.64 billion buyout offer of rival Australian casino operator Crown Resorts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/star-entertainment-rescinds-6-6b-crown-resorts-buyout-proposal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Star Entertainment Rescinds 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