Crown Resorts takeover bid: Is Blackstone being opportunistic?
The Crown share price opened lower on Tuesday, down 2.51% by 10:18AM.
Crown Resorts (ticker: CWN) yesterday announced that Blackstone has made an unsolicited non-binding, $11.85 per share takeover bid. That offer represents a significant premium to Crown’s closing price last Friday. For reference, Blackstone already owns 9.9% of Crown.
Interested in trading stocks like Crown? Open an account with IG now
Investors responded enthusiastically to the takeover offer, with the Crown share price finishing out Monday 21% higher, at $11.97 per share, just ahead of Blackstone’s bid.
Analysts weigh in
While the takeover offer represented a significant premium to last week's closing price, as Macquarie analysts point out, against Crown’s historical trading range of 7.9x to10.6x EBITDA, the bid may be considered ‘opportunistic’.
The $11.85 per share offer implies a 9.4x FY23 EBITDA, around the mid-point of CWN’s trading range, according to Macquarie.
How we got here
After hitting a 52-week low of $5.64 per share in March 2020, the Crown Resorts share price has rallied, up close to 100% at yesterday's close.
Short-term optimism aside, the company faces to key points of uncertainty that investors will likely closely monitor moving forward. These include:
- AUSTRAC's ongoing investigation into Crown – which is chiefly focused on customer due diligence and AML/ CMF matters.
- A royal commission into Crown’s Perth and Melbourne casinos. The comission is set to start on March 24, 2021.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Live prices on most popular markets