Investor support grows for Crown takeover

Investment powerhouse and long-time major Crown Resorts shareholder Perpetual has thrown its support behind private equity giant Blackstone’s proposed $8.87 billion buyout of the bruised casino group, in a sign shareholders are likely back the deal.

Crown’s Ziggy Switkowski-led board said on Thursday it would recommend shareholders support a Blackstone takeover if it puts forward a binding proposal, after raising its indicative bid from $12.50 to $13.10.

Crown’s shares jumped 8.77 per cent on the news to close at $12.65, below the offer price indicating the market still holds some doubt the sale will go ahead. The deal is subject to Blackstone completing full due diligence and receiving approval from gambling regulators in the three states Crown operates.

Fund manager Perpetual – which owns just over 9 per cent of Crown, making it its third largest shareholder behind Mr Packer and Blackstone itself, which owns 9.9 per cent – said it welcomed the new offer and would back a sale at that price.

“Perpetual looks forward to a binding transaction being executed and unless a superior proposal is presented, is in favour of the transaction,” Perpetual’s head of equities Paul Skamvougeras said.

Billionaire media scion James Packer, whose 37 per cent shareholding in Crown will be pivotal in any shareholder vote, said he was “encouraged” by the announcement in the firmest sign yet he is willing to sell.

Crown has been battered over the past two years as the pandemic forced its properties to close and public inquiries into corporate misconduct threatened to cancel its Melbourne, Sydney and Perth casino licences.

Forager Funds chief investment officer Steve Johnson said the deal was “definitely getting closer to the end game”.

“There’s a lot of regulatory uncertainty and still a lot to finalise, but I feel like price-wise, it’s getting closer to something that makes sense,” said Mr Johnson, whose fund owns Crown shares.