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(Reuters) -Australian casino operator Star Entertainment Group on Friday withdrew a A$9 billion ($6.6 billion) buyout proposal for rival Crown Resorts Ltd after an inquiry heard the target should lose its main licence, sending its shares lower.
FILE PHOTO: The logo of Australia s casino operator Crown Resorts adorns a fence surrounding the Crown Perth hotel and casino complex in Western Australia, October 20, 2016. REUTERS/Aaron Bunch
Star, the country’s No. 2 casino operator, said it may yet consider a tie-up with the troubled larger company, but was concerned about the impact of an inquiry on its value “including whether it retains the licence to operate its Melbourne casino or the conditions under which its licence is retained.”
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The Star Entertainment Group Limited has withdrawn a $12 billion merger proposal with beleaguered rival Crown Resorts citing the uncertainty over the James Packer-controlled firm retaining its casino licences in the wake of royal commissions in Victoria and Western Australia.
Star said it was concerned that issues raised at the inquiry into Crown Melbourne could materially impact the business.
Credit:Louise Kennerley
“We continue to believe substantial benefits could be unlocked by a merger, however the uncertainty surrounding Crown is such that The Star is unable to continue at the present time with its Proposal in the form as announced,” the company said in a release to the ASX.
Star Withdraws Proposal To Merge With Billionaire James Packer s Crown forbes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from forbes.com Daily Mail and Mail on Sunday newspapers.
Asian Markets Mostly Lower Cautious Trade
CANBERA (dpa-AFX) - Asian stock markets are trading mostly lower on Friday, ignoring the positive cues overnight from Wall Street, as lingering worries over rising spread of the delta variant of the coronavirus in several parts across the world rendered the mood cautious. The markets are supported mainly by crude oil prices as they continue to recover from the recent selling-off. Asian markets ended mostly higher on Thursday.
Australian stock market is slightly higher after early losses on Friday, extending the gains in the previous two sessions, with the benchmark S&P/ASX 200 staying just below the 7,400 level, following the positive cues overnight from Wall Street. Traders also remain concerned amid the rapid spread of the highly contagious coronavirus variants in four states and some regional areas, with lockdowns in three of the country s major cities limiting economic activity.
Huntley Mitchell 23 Jul 2021
The Star Entertainment Group has withdrawn its proposal to merge with Crown Resorts, citing “issues” raised at Victoria’s Royal Commission into Crown Melbourne as a major factor.
When the offer was
initially tabled by The Star in May, chairman John O’Neill claimed that bringing together the two rivals would create an estimated $12 billion ASX-listed national tourism and entertainment giant.
The Star also estimated that a merger with Crown would result in cost synergies of between $150 million and $200 million per annum.
However, The Star’s tune has changed dramatically since then, so much so that the company has now decided to pull its proposal.