Blackstone has made a third non-binding indicative offer for casinos operator Crown Resorts (CWN).

The $9.3 billion $12.50-per-share offer, announced by Crown on 19 November, follows a $12.35-per-share $8.5 billion offer announced on 20 May.

The earlier offer was rejected by Crown as not fully reflecting the value of the business.

The new proposal is again subject to Blackstone receiving final approval from casino regulatory authorities in Victoria, NSW and Western Australia for Crown to continue its gaming operations in those states.

Blackstone has told Crown that it has engaged with regulators and been advised that there is no reason to believe necessary approvals will not be forthcoming but noted that this situation could change as Crown remains under regulatory review.

Crown’s position has, however, become a little clearer since it rejected Blackstone’s May offer. A Victorian royal commission into the company found it allowed criminal activity such as money laundering to take place at its Melbourne casino and has said it will have to operate under independent oversight in future but did not cancel the licence. Similarly, in NSW an inquiry concluded that Crown had not taken action against criminal activity at its Melbourne and Perth casinos but did not reach a conclusion that it should not be allowed to introduce gaming operations at its new Barangaroo, Sydney, casino. A Western Australian inquiry is continuing.

 With the new offer only 15 cents a share higher, it might be expected that that Crown would swiftly reject it. But other circumstances have changed for Crown.

Rival casino operator The Star Entertainment Group (ASX: SGR) proposed a merger in May.

Now, The Star is also under regulatory scrutiny which makes it less likely to offer a competing bid. This may, in fact, have prompted Blackstone to make its new bid.

Crown said its board has not yet formed a view on the merits of Blackstone’s latest proposal “having regard to the value, terms of the proposal and other considerations”.

Delay in responding suggests Crown is seeking a higher indicative offer from Blackstone before it will agree to provide due diligence, or that it is looking for at least one other bidder to provide competition. Most likely it is seeking both.

The sharemarket indicated it was undecided whether Blackstone’s latest bid would be successful; it drove Crown’s share price up from below $10 to $11.54 but still well below the indicative offer price.

Blackstone has a 9.99% stake in Crown which it acquired from Melco Resorts & Entertainment for $8.15 a share in April 2020.

Crown has appointed UBS and Gresham Partners as financial advisers and Herbert Smith Freehills as legal adviser to the proposal.

Image: Crown’s Melbourne casino.