Shares in Crown Resorts Ltd (ASX: CWN) are gaining today after news the company has rejected Blackstone Group Inc's (NYSE: BX) acquisition offer. At the time of writing, the Crown share price is up 0.88%, with shares in the company trading for $13.16.
While Crown has officially knocked back Blackstone, it's still considering the merger proposal put to it by Star Entertainment Group Ltd (ASX: SGR).
The acquisition offer from Blackstone was proposed on 22 March and revised twice, with the latest revision announced last week. It would have seen Blackstone buying all shares in Crown and paying $12.35 per share.
Let's take a look at the news driving the Crown share price today.
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No deal
According to Crown, its board unanimously agreed that the offer undervalued Crown and wasn't in its shareholders' best interests.
The board took into account both revisions of the offer. The first being that Blackstone could take on greater regulatory risk in exchange for faster acquisition. The second, an offer of an extra 50 cents per share more than the original offer of $11.85 per share.
Crown stated the original takeover offer was only a 19% premium on the volume-weighted average price between the release of its results from the first half of the 2021 financial year and Blackstone's initial acquisition offer.
It also said the prices revision only represented a 4% increase on the original offer despite the S&P/ASX 200 Index (ASX: XJO) gaining 6% in the time between the initial offer and the second revision.
The offer was also rejected because of its timing. Crown stated it came at an opportune moment. Right in between the release of Crown's loss of earnings due to COVID-19 and the enactment of its plan to pay off a significant portion of debt.
Crown has rejected Blackstone's offer despite reports on Friday that its substantial shareholder Perpetual Investments was pushing for Crown's board to sell the business.
Star merger still on the cards
After turning down Blackstone, Crown advised that its board still hasn't made a decision regarding Star Entertainment's merger proposal.
Star proposed the merger last Monday. At the time, The Motley Fool Australia reported Star believed the merger could "create a national tourism and entertainment leader with a world-class portfolio of integrated resorts".
The merger would see Star trading 1 Crown share in for 2.68 shares in Star Entertainment.
Today, Crown announced it has requested more information from Star to help its board better understand some preliminary matters.
Crown share price snapshot
The Crown share price has performed well on the ASX this year.
Currently, the Crown share price is up 32.9% year to date and has lifted 42.4% over the last 12 months.
The company has a market capitalisation of around $8.8 billion, with approximately 677 million shares outstanding.
