The Star Entertainment Group Limited (The Star) has today announced that it has submitted a conditional, non-binding, indicative proposal to merge with Crown Resorts Limited (Crown) at a nil-premium share exchange ratio of 2.68 The Star shares per Crown share (Indicative Proposal).
Based on recent trading values of The Star and the substantial value that would be unlocked by a merger, The Star estimates its pro forma share price to be more than AUS$5 per share implying a potential value of the Scrip Consideration in excess of AUS$14 per Crown share. The Indicative Proposal also includes a cash alternative of AUS$12.50 per Crown share for up to 25% of Crown’s issued share capital (with any scale back to occur on a pro-rata basis) (Cash Alternative). Crown shareholders that accept the scrip consideration may qualify for capital gains tax rollover relief.
The Star’s Chairman, Mr John O’Neill AO, said that bringing together The Star and Crown would create an estimated AUS$12 bn (£6.71 bn/US$9.45 bn/€7.77 bn) ASX-listed national tourism and entertainment leader. “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. 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.”