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Blackstone Group has raised its offer for Crown Resorts, moving it closer to taking over the troubled casino operator controlled by Australian billionaire James Packer.

The U.S. private equity giant increased its bid to A$13.10 a share, valuing Crown at A$8.9 billion ($6.5 billion), after the Melbourne-based company said last month that its latest offer wasn’t compelling. That’s 4.8% higher than the A$12.50 a share offer made by Blackstone in late November just weeks after Australian regulators placed Crown under government-supervised reforms aimed at stamping out money laundering at its casinos.

“It is the Crown board’s current unanimous intention to recommend that shareholders vote in favor of the proposal in the absence of a superior proposal,” Crown said in a statement on Thursday.

This is the fourth time Blackstone, which already owns 10% of Crown, has sweetened its offer after the Australian company rejected its previous bids of A$11.85 in March and A$12.35 in May. This time around, Crown said it will give Blackstone an opportunity to finalize its due diligence inquiries and negotiate the terms of an agreement so that it can put forward a binding offer.

In the past year, Crown has received several competing offers even as regulatory scrutiny intensified. While it rejected Blackstone’s previous offers, rival Australian casino operator Star Entertainment scrapped a merger proposal in July as regulators alleged Crown of tax evasion and lax anti-money laundering controls at its flagship Melbourne casino. An offer from Oaktree Capital to fund the buyout of Packer’s stake also didn’t materialize.

In October, an independent inquiry by Victoria’s Royal Commission found Crown unsuitable to hold a casino license at its Melbourne casino after failing to address money laundering risks and concealing potential tax underpayment. However, the government decided to allow Crown to operate under the oversight and direction of a special manager for two years while the company implements comprehensive reforms.

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Losing the Melbourne casino license would be a major blow to Crown, which has already failed to get the permit to run its brand new casino in Sydney. Besides regulatory scrutiny, Crown has said its earnings outlook will continue to be clouded by ongoing pandemic-induced travel restrictions and lockdowns.

Packer is the largest shareholder of Crown, which owns casinos in Australia and London, after taking over the empire of his late father, Kerry. He stepped down from the company’s board in March 2018 and resigned from the board of his family’s holding company Consolidated Press four months later. Packer, 54, had a net worth of $3.2 billion, according to the World Billionaire’s List published in April.

Source: Forbes

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