Australian Star Entertainment Abandons the $6.6 billion acquisition of Crown Resorts Reuters

(Reuters)-Star Entertainment Group said it has withdrawn its all-share acquisition of its larger rival Crown Resorts on Friday due to concerns that Crown may lose its license to operate its Melbourne casino, valued at A$9 billion (6.64 billion). US dollars).

Australia’s second-largest casino operator said it still believes in the benefits of the transaction, but is concerned that the questions raised in the investigation of Crown Melbourne Casino may affect the value of the troubled company.

Crown stated in a statement that it remains willing to engage with Star and will continue to consider any proposals it receives.

An ongoing investigation on Tuesday was told that Crown should be deprived of the Melbourne resort’s gambling license. Due to insufficient efforts to reform the culture, the resort’s casino generated about three-quarters of the company’s profits.

Star’s decision canceled Crown’s lifeline. Crown has been trying to persuade regulators in an investigation earlier in February to find that it allowed money laundering at its premises to rebuild its culture for many years, and declared that the company is not suitable to open a newly established company in Sydney. The built casino.

The investigation and the closure of the venue due to the COVID-19 lockdown led to a decline in Crown’s stock price, which triggered at least two acquisitions of the company, in which billionaire James Packer holds 37% of the shares.

In May, Crown rejected the low-price proposal of the acquisition giant Blackstone Group (NYSE:), using Star’s approach as its main choice, demonstrating to regulators that it can completely reform itself under the new ownership.

Crown does have another option. Oaktree Capital Group submitted a proposal in April to fund the A$3 billion Packer share repurchase, which eliminated regulatory concerns.

Star said it will continue to explore “potential value enhancement” opportunities with Crown, and Crown also faces another investigation into its Perth casino.

($1 = 1.3548 Australian dollars)