Home / World News / Crown Resorts makes pitch for higher takeover offers

Crown Resorts makes pitch for higher takeover offers

Beleaguered Crown Resorts is not pinning its hopes on a takeover by US private equity giant Blackstone and is spruiking the potential of its $2.2 billion Sydney casino to encourage higher offers.

Crown leaders on Monday gave little away about progress of talks with Blackstone but made clear they are open to other prospective partners and opportunities.

Chief executive Steve McCann made reference to Blackstone’s unsuccessful $8.46 billion offer, priced at $12.50 a share and the third of its unsolicited bids.

“We’ve made it clear we don’t think that offers compelling value (for shareholders),” Mr McCann said. “We’ll be looking at every alternative to try and maximise value.

“The first step is getting Crown Sydney open and making sure the market can see the value of these fantastic assets and get trading up post-pandemic. We won’t be dismissing any alternative.”

Non-gaming operations at Crown Sydney reopened to fully vaccinated guests and staff in October and has enjoyed strong demand for food and beverage offerings. Hotel occupancy had also improved but the site remains closed to gaming after a probe by the NSW Independent Liquor and Gaming Authority earlier this year found its unfit to hold a licence.

A Victorian royal commission made a similar finding around the company’s Melbourne casino in October, but gave the company two years to address a litany of shortcomings, taking the unusual step of appointing a special manager to run the riverside complex.

A royal commission into the company’s Perth operations is expected to report in March.

Crown outlined its hopes for the future of its Sydney development in an investor presentation made on Monday, saying gaming areas were ready for opening on a staged basis, pending a determination of suitability by ILGA

“Good progress has been made in implementing the reforms outlined in our remediation plan, including those outlined in the Bergin report, and continue to work constructively with the independent monitor,” it said.

But Crown warned its rebound from the pandemic could be hampered by staff shortages that were “a significant issue” across all three of its resorts in Perth, Melbourne and Sydney, impacting on operational capacity.

Operating restrictions have been progressively lifted for fully vaccinated patrons and staff in Melbourne, where main floor gaming revenue in the two weeks to December 5 was now about 75 per cent of pre-COVID levels. Non-gaming revenue was about 65 per cent of pre-pandemic levels.

It noted mid-week performance continued to reflect subdued activity in the CBD and reduced foot traffic.

Crown’s Perth operations at Burswood have continued almost uninterrupted for much of the year and it was enjoying strong demand for its leisure offering, particularly on weekends. Non-gaming revenue for the financial year to December 5 was up 31 per cent on the previous year and 11 per cent on FY20.

Its gaming business was being driven by strength in gaming machines, while table games performance remaining subdued. Revenue from main fall gaming was down 8 per cent on the previous year.

Crown said it was continuing to navigate through an uncertain environment with ongoing impacts from the pandemic, as well as various regulatory processes which remain unresolved following a year of damning inquiries.

“All three Australian resorts have reopened on a staged basis, with an expected improvement in economic activity as COVID-19 restrictions ease, including the reopening of domestic and international tourism,” it said.

Crown shares closed unchanged at $11.45.

About brandsauthority

Check Also

Cotton’s 40 points leads Perth past Hawks

It took a Herculean effort and a season-high points haul from Bryce Cotton as Perth …

%d bloggers like this: