With Ziggy Switkowski now in line to take the top boardroom job at Crown Resorts, the question is whether suitors are still circling the casino operator and how the seasoned director may respond.
DataRoom revealed on Thursday that Crown had picked a Melbourne-based chairman with close ties to Telstra to take the top job, which has now emerged as Dr Switkowski, as first reported by The Australian’s Margin Call column.
Blackstone’s bid of about $8bn or $12.35 a share for the group was knocked back by the Crown board in May – now the company’s market value is $6.36bn, with shares closing on Thursday at $9.29.
Crown rival Star Entertainment made a $12bn scrip offer that included a $12.50-a-share cash alternative, but it was later withdrawn.
On the face of it, it may appear that Blackstone could now pick up the business more cheaply, but some think a suitor will have to pay up further for the assets.
Experts believe the real estate alone is worth $8 a share.
With former Lendlease boss Steve McCann now at the helm, most predict that a real estate spin-off is on the cards down the track in a classic defensive play.
If Crown is subject to a break-up, which could be on the cards to appease regulators, a view is that Blackstone remains a keen buyer of at least one of the casino assets.
Crown, which is 37 per cent-owned by James Packer, has been the subject of a NSW inquiry and two royal commissions, in Melbourne and Perth, surrounding its conduct on the back of evidence of money-laundering during Asian high-roller “junket” tours at Crown’s Melbourne and Perth venues.
An inquiry by former NSW Supreme Court judge Patricia Bergin into the company’s corporate governance earlier this year found that Crown was not fit to hold a NSW casino licence, but Crown has since told the NSW Independent Liquor and Gaming Authority it will implement several recommendations from the inquiry.
Findings from the Victorian royal commission will be handed down by October 15 with recommendations to be made to the Victorian Commission for Gambling and Liquor Regulation, while the Perth royal commission is ongoing and recommendations are due out around March.
It may be around this time that Blackstone re-emerges.
There are experts who predict that some of the requirements that Crown may be required to meet to hold a casino licence in Victoria include an agreement to pay a higher tax rate, repaying tax or hiring an external auditor.
Dr Switkowski ran Telstra between 1999 and 2004 before taking on the chairman role at NBN and directorships at Suncorp, Healthscope, Oil Search and Tabcorp.
Current chairman Helen Coonan indicated last month that she will resign by the end of this month and step down as chairman by around the time of the annual general meeting in October once a suitable replacement can be found.
Crown reports its full-year results on Monday.
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