Why is the Crown Resorts (CWN) share price rising?
Shares in the casino operator have already climbed 36% in the last 6 months but are set to jump higher.
Shares in casino giant Crown Resorts (ASX: CWN) are up more than 2.5% to $12.70 on the ASX in early trading on Monday. But the stock is set to jump even higher after having already regained a quarter of its value in the last 12 months.
Why is the Crown stock price rising?
Crown Resorts is climbing after the company on Monday announced it has agreed to accept an $8.9 billion takeover deal from US private equity giant Blackstone.
Blackstone, which already holds just under a 10% stake in Crown, will pick up the shares at $13.10 each, a 32% premium since takeover talks began last November, and a nearly 6% improvement on the last closing price on Friday.
Crown chairman Ziggy Switkowski said the all-cash offer provides shareholders with certainty of value.
"The Blackstone Transaction represents an attractive outcome for shareholders. The Crown Board has consistently stated it is committed to maximizing value for Crown shareholders," he said in a statement to the ASX.
Crown shareholders are expected to vote on the proposal in March or April, subject to the deal receiving regulatory approval.
The decision would come as a relief for Crown shareholders after months of damaging revelations that put the company in financial hot water, and prompted widespread changes in its board of directors as well as senior management.
Crown was allowed to retain the licence for its biggest casino in Melbourne, albeit with a Special Manager to oversee the company, after the Victorian royal commission found widespread instances of illegal and unethical conduct and recommended cancelling Crown's licence.
It followed just months after the Bergin Inquiry in New South Wales similarly found Crown unfit to hold a casino licence in the state, leaving the gaming floor at its brand new $2.2 billion Sydney Harbour resort shuttered.
The Victorian commission and a separate inquiry into Crown's Perth casino were called in the aftermath of the New South Wales investigation, which found that the company likely facilitated money laundering by partnering with individuals who had links to organised crime.
The regulatory troubles also dashed hopes for a merger between Crown and rival Star Entertainment Group (ASX: SGR), which abandoned its $9 billion bid in July.
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