Paying the price: Star Entertainment withdraws Crown Resorts offer after Victoria hearings
The Star Entertainment Group has withdrawn its conditional proposal to merge with Crown Resorts.
The proposal was initially announced on 10 May 2021 and was based on the benefits for shareholders of both companies, including estimated cost synergies of between $150m to $200m per year.
“To date, The Star has had limited engagement with Crown on its proposal,” the operator said in a statement. “Issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the licence to operate its Melbourne casino, or the conditions under which its licence is retained.”
The Star added that it still sees potential in a merger; however, due to the uncertainty of Crown’s fate regarding the verdict of the royal commission, the company cannot continue with the same proposal that was introduced in May.
The Star remains open to more opportunities with Crown, though will monitor ongoing inquiries and await results that should be released by the end of the year.
Instead, the Star aims to focus inwards, looking into “its growth initiatives, including its world-class multi-billion dollar Queen’s Wharf Brisbane integrated resort (due to open in late 2022) and its Gold Coast masterplan.”
The investigation into Crown was launched after allegations of money laundering in one of the company’s casinos.
The Bergin Inquiry revealed cases of mismanagement and neglect when it came to supervising the casino’s financials, with other subsequent inquiries launched into other properties such as Crown’s Perth casino.
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