Hong Kong group CC Land Holdings joins surge of bidders for Crown

Most believe that the contest for Crown ultimately will conclude with the Morgan Stanley-advised Blackstone as the winner, given its financial firepower and expertise in the casino and real estate industry. Picture: AFP

More potential bidders are coming out of the woodwork for Crown Resorts, with sources pointing to the Hong Kong-listed CC Land Holdings as a party eyeing up the prized casino operator.

Sources say CC Land could comfortably lob a knockout bid for Crown, but the probity checks would be extensive and extreme, given the current Australian government tensions with China.

CC Land counts real estate development as its core business and is 70 per cent-owned by Hong Kong property tycoon CK Cheung, who bought one of London’s most expensive homes and owns the tallest tower in the British capital known as the “cheesegrater”.

Meanwhile, some are still not discounting Wynn Resorts to re-emerge with interest in buying Crown Resorts after it entered talks about a $10bn acquisition in 2019 without embarking on a deal.

Sources say that investment banking advisers at Goldman Sachs are in discussions with the US-based group about its intentions for Crown, with market analysts suggesting that the Nevada-based group would probably be viewed favourably through the eyes of Australian regulators.

DataRoom also understands that private equity firm Apollo Global Management has held talks with Oaktree Capital about joining forces with its US-based rival for a joint financing offer.

Private equity group Oaktree had earlier proposed a $3bn line of credit should Crown Resorts choose to buy back “all or some” of the 37 per cent stake in the company owned by James Packer, who is taking advice from Moelis.

However, others say that Apollo has also been assessing whether to weigh into the bidding war for the entire company and has also looked at submitting a rival refinancing proposal to that made by Oaktree.

Oaktree, advised by Jefferies Australia, and Apollo worked together on a recapitalisation of Nine Entertainment several years ago.

BGH Capital, which is run by former TPG Capital executives, is no longer thought to be an interested contender for Crown, according to sources.

TPG weighed an acquisition of Crown in the past.

One market source said the thinking earlier had been that when Blackstone had purchased a stake in Crown and lobbed an offer, it would be a stitched-up deal with the New York-based private equity firm.

But now the view is that Crown is in play.

The Star Entertainment Group’s merger offer lobbed on Monday stood at between $11.30 and $11.60 a share at the close of trade, depending on whether shareholders accepted an alternative offer with a cash component.

Blackstone also sweetened an earlier bid by 50c a share to $12.35.

While the Crown board has been silent on how it sees the proposals, market analysts believe it is likely that Crown, under its newly appointed chief executive Steve McCann, will run a strategic review before offering any recommendation on a particular approach or else grant the two parties that have lobbed proposals the chance to embark on due diligence.

Crown’s shares closed at $13 on Monday, well above both Blackstone and Star’s offers, taking its market value to $8.2bn.

There is divided opinion in the market as to whether Star would gain regulatory approval for an acquisition.

Some say that the Credit Suisse and Flagstaff Partners-advised suitor has already been offered an unofficial signal that it would gain regulatory clearance.

However, others say that Star, which sources say still counts Malaysia’s Genting as a backer despite no longer being listed as a major shareholder, would not be a fitting buyer from the perspective of the regulators.

They argue that it would make Star a monopoly player in Australia, which would make the government uneasy.

Crown, backed by Mr Packer, has been an arch rival of Star’s over the years, with Crown’s approval for the Barangaroo casino licence in Sydney a major sore point.

Star is known to have been circling Crown for some time and on Monday signalled an intention to explore a potential sale of its real estate.

Some believe that Star would most likely choose a Malaysian real estate player to work with on a sale and leaseback of what would probably be a half share of Crown’s property portfolio that would require a $2bn cheque.

But while real estate groups are known to have made approaches to Star about taking part in the proposal, it is understood that it is yet to commit to one party.

Most believe that the contest for Crown ultimately will conclude with the Morgan Stanley-advised Blackstone as the winner, given its financial firepower and expertise in the casino and real estate industry.

Crown and Star shareholders have wanted a merger for a long time, but ultimately, in corporate takeovers, cash is considered king.