The James Packer-backed group said on Monday morning it was still weighing up a rival A$12 billion tie-up merger offer from The Star and had requested more information from its rival.
Blackstone, which already owns 10% of Crown, announced its first takeover offer in March and last weekend increased it from A$11.85 per share to A$12.35. But Crown said on Monday the offer undervalued the group.
In a release to the ASX, Crown said: “The board has unanimously concluded that the revised proposal undervalues Crown and is not in the best interests of Crown’s shareholders.”
The regulatory conditions attached to Blackstone's bid were also an issue to the company. Crown’s casino license is suspended in New South Wales and it is currently facing royal commissions in Victoria and Western Australia.
Blackstone has applied to state governments for approval to buy Crown but the New South Wales regulator has cast doubt on its hopes of completing that by October.
Crown said: “There is significant uncertainty as to the timing and outcome of the regulatory approval processes. As a result, the conditions of the revised proposal as currently understood present an unacceptable level of regulatory uncertainty for Crown shareholders.”
The Star says its proposal to merge Australia’s two major casino companies is worth A$14 a share to Crown shareholders, which is based on achieving A$150 million to A$200 million annually in cost-saving synergies worth about A$2 billion in equity value.
The Star has proposed buying back up to a quarter of Crown’s shares at A$12.50 and issuing investors in both companies stock in the new listed entity. The group has also flagged possibly selling and leasing back the combined group’s properties, a scenario in which Blackstone is considered a likely partner.
Crown’s update follows growing frustration from Blackstone about a lack of engagement from the board on its offer and shareholders who want Crown to start a formal sale process to capitalize on the interest in the group.
Crown has also received a proposal by Oaktree Capital Group to bankroll a A$3 billion purchase of founder James Packer’s 37% stake to remove regulatory concerns. Crown executives on Monday were facing their first day of six-week hearings at a government-mandated inquiry in Victoria to assess whether Crown is fit to keep its operating licence in that jurisdiction.