US investment giant Oaktree has revised its proposal to buy a 37 per cent stake in Crown Resorts, adding another $100 million to its proposal.
Oaktree’s deal would allow Crown to buy James Packer’s stake, which is held under his company Consolidated Press Holdings (CPH), at what Crown said was an effective price of $12 a share.
The revised offer outlines a $3.1-billion facility consisting of two tranches: a $2-billion private term loan and a $1.1 billion loan convertible into new shares to be issued by Crown.
Oaktree’s previous proposal, a mix of debt and equity, had provided a $3-billion funding commitment via a structured instrument with the proceeds to be used by Crown to “selectively” buy-back all of the Crown shares held by CPH.
Oaktree’s latest offer would cap its shareholding in Crown at 9.9 per cent, avoiding the need for probity approval from regulators with the remaining part of the convertible component to be cash settled.
If accepted, Oaktree’s facility term will run for seven years, with a coupon of 6 per cent per annum payable for the first two years and 6.5 per cent for every year thereafter.
Crown’s board, headed by executive chairman Helen Coonan, said in an announcement it had yet to form any view on the merits of the proposal.
Last month, Crown rejected a revised $8.4-billion straight takeover offer from US private equity giant Blackstone.
Blackstone, which owns 9.9 per cent of Crown, altered its bid in May shortly after The Star entered the fray—raising its offer from $11.85 per share to $12.35.
The Star’s $12-billion bid to merge, led by advisers Flagstaff and Credit Suisse—worth $14 a share, aimed to give Crown shareholders Star shares and or cash for their stock.
In February, findings from an 18-month probe by former NSW Supreme Court judge Patricia Bergin into Crown’s practices, rendered the casino operator unfit to hold a casino licence in the state.
Crown is also currently involved in two royal commissions, in Victoria and Western Australia, into its suitability to run casinos in those states, as well as an AUSTRAC investigation.