The Crown Resorts Ltd (ASX: CWN) share price could be on the move on Monday morning.
This follows news that another private equity firm has tabled a proposal.
What did Crown announce?
This morning the casino and resorts operator announced that it has received an unsolicited, preliminary, non-binding and indicative proposal from a company on behalf of funds managed and advised by Oaktree Capital Management.
According to the release, Oaktree Capital Management has offered to provide a funding commitment of up to ~A$3.0 billion to Crown via a structured instrument.
Why is Oaktree offering to provide funds to Crown?
The release explains that Oaktree Capital Management has proposed that Crown uses the funds to buy-back some or all of the Crown shares which are held by Consolidated Press Holdings on a selective basis.
Consolidated Press Holdings is the company owned by former Crown Chairman James Packer. It currently owns a ~37% stake in the embattled company.
What now?
Crown responded by stating that any selective buy-back of Crown shares held by CPH would be subject to shareholder approval, with no votes being cast in favour of the resolution by CPH or its associates.
However, at this point, the Crown Board has not yet formed a view on the merits of the Oaktree Proposal. It will now commence a process to assess the proposal.
Crown has also advised shareholders that they do not need to take any action in relation to the Oaktree Proposal at this stage. It also warned that there is no certainty that the Oaktree Proposal will result in a transaction.
What about the takeover?
No comments were made on what impact this proposal would have on the unsolicited, non-binding and indicative proposal by The Blackstone Group and its affiliates.
In March, Blackstone tabled a takeover offer with an indicative price of A$11.85 cash per share. This will be reduced by the value of any dividends or distributions declared or paid by Crown.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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