Crown Faces Shutdown, $9B Merger Withdrawn

Crown Resorts has lost its $9 billion merger proposal with Star Entertainment Group, per Bloomberg. 

Brisbane-based Star proposed an all-stock merger with Crown in May to create an Australian gaming and hospitality giant. 

Star, Crown’s closest rival, has withdrawn from merger talks after allegations of tax evasion, money-laundering, and a potential shutdown of Crown’s Australian casino empire. 

“Substantial benefits could be unlocked by a merger,” said the company. “However, the uncertainty surrounding Crown is such that Star is unable to continue at the present time.”  

Star’s opt-out adds to a contentious year for Crown.

• A judge ruled in February that Crown was ineligible to operate its $2.2 billion Sydney resort and casino after an investigation revealed money laundering. 
• Blackstone Group, which already owns 10% of the gaming operator, offered $6.2 billion for Crown in March. The offer was rejected for being too low. 
• Crown received a proposal from Oaktree Capital Group in June for $2.4 billion in funding to buy back the shares held by James Packer, its controlling shareholder with a 36% stake.

Shares of Crown fell as much as 4.4% on Friday in early trading. The stock has dropped around 24% from its recent peak in May.