Merger between The Star and Crown off the table for now

The Star Entertainment Group has withdrawn its $12 billion merger offer with Crown Resorts amid licence doubts but maintains a future deal hasn’t been ruled out altogether.

The doubts are centred around the future of Crown’s Melbourne casino licence which is hanging in the balance after a recommendation by counsel assisting the Victorian royal commission into Crown’s operations that it is not suitable to operate Crown Melbourne.

“To date, The Star has had limited engagement with Crown on its proposal,” the Star told the ASX.

“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.”

The only offer on the table is the $3 billion offer by Oaktree Capital to fund the buyout of James Packer’s stake in Crown.

“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 said.

“The Star remains open to exploring potential value enhancing opportunities with Crown. The Star will continue to closely monitor the Victorian royal commission and Perth Casino royal commission, with final findings expected later this year.”

Crown Resorts said it was also open to a potential merger in the future.

“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.