The Star Entertainment Group has pitched a merger proposal to its rival Crown, in what would create a $12 billion casino and entertainment giant in Australia.
The Star is offering 2.68 of its shares for every Crown share in a non-binding proposal, which Star says values Crown shares above $14.
Crown shareholders would also be offered the alternative of $12.50 cash per share, up to a limit of 25 per cent of its shares.
The proposed merger follows a bid for Crown by US private equity firm Blackstone, which was raised from $11.85 to $12.35 a share.
Crown is currently struggling following a NSW Bergin inquiry which focused on its junkets and possible links to criminal organisations. It is also facing royal commissions about its practices in Victoria and Western Australia.
“A merger of The Star and Crown would result in significant scale and diversification and unlock an estimated $2 billion in net value from synergies,” The Star chairman John O’Neill said.
“With a portfolio of world-class properties across four states in Australia’s most attractive and populated catchment areas and tourism hubs, the combined group would be a compelling investment proposition and one of the largest and most attractive integrated resort operators in the Asia-Pacific region.”
O’Neill also said the company is confident it would get the necessary approval from the ACCC to proceed with the merger.
“Given its existing relationships with governments and regulators and its proven track record of governance and compliance, The Star is confident it is well positioned to obtain the necessary regulatory approvals for the merger,” he said.