The Star Entertainment Group has withdrawn its proposal to merge with Crown Resorts, citing “issues” raised at Victoria’s Royal Commission into Crown Melbourne as a major factor.
When the offer was initially tabled by The Star in May, chairman John O’Neill claimed that bringing together the two rivals would create an estimated $12 billion ASX-listed national tourism and entertainment giant.
The Star also estimated that a merger with Crown would result in cost synergies of between $150 million and $200 million per annum.
However, The Star’s tune has changed dramatically since then, so much so that the company has now decided to pull its proposal.
“To date, The Star has had limited engagement with Crown on its proposal,” it said in a statement.
“Also, 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.
“We continue to believe substantial benefits could be unlocked by a merger. However, the uncertainty surrounding Crown is such that The Star is unable to continue at the present time with its proposal in the form as announced on 10 May 2021.
“The Star remains open to exploring potential value-enhancing opportunities with Crown.
The company said it will continue to closely monitor the Victorian Royal Commission and Perth Casino Royal Commission, with final findings expected later this year.
The Star also said it remains focused on its growth initiatives, including the company’s world-class multi-billion-dollar Queen’s Wharf Brisbane integrated resort due to open in late 2022, and its Gold Coast masterplan.
Crown said in a statement that it remains willing to engage with The Star in relation to a potential merger on terms acceptable to both parties.
“The board is committed to maximising value for all Crown shareholders and will carefully consider any proposal that is consistent with this objective,” it said.
“Crown is continuing to implement its reform agenda. Crown will also continue to fully co-operate in relation to the various regulatory processes.”
The Star’s bid for Crown isn’t the first one to fall over, either, with the beleaguered casino giant giving Blackstone’s acquisition proposal the flick in May.
Featured image source: iStock/kokkai