The Blackstone Group, an American private equity firm, has made a new bid to purchase all shares in Australia’s Crown Resorts. Crown issued a statement early Friday stating that Crown’s latest bid was valued at AU$8.5 billion ($6.2 billion), and Blackstone offered AU$12.50 per share – in cash – in a scheme of arrangement.

Blackstone Makes New Play for Crown

The current offer is significantly higher than Blackstone’s previous bids of AU$11.85 per share and AU$12.35 per share earlier this year. Crown rebuffed the Crown’s May counter-offer, claiming that the offer undervalued its assets as well as future earnings power.

The revision follows the release of Victoria’s Royal Commission’s findings on Crown Melbourne’s questionable management. The Australian state did not revoke or suspend Crown’s casino license, but instead provided a window of two years under the watchful eye of a special manager for the company to prove that it was suitable.

Crown is also working with New South Wales’ regulator to attain suitability for the Crown Sydney casino. The findings of the Royal Commission into Crown Perth will be presented early next year.

Blackstone Facing an Uphill Battle

According to the announcement made this morning, Blackstone’s new proposal is subjected to a variety of conditions. These include due diligence on Crown covering regulatory and commercial, financial, operational, taxation and legal matters. Blackstone will receive final approval from its investment committees. All Crown directors have to commit to voting in favor of the proposal.

According to the Crown statement, “Any acquisition of Crown by Blackstone would be conditional on Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia. Blackstone has stated that it has engaged with the regulators in relation to this issue and that the Regulators’ advisers have indicated to Blackstone that there is no reason to believe that an approval would not be realised.”

Blackstone said it would finance the proposed transaction with equity through one or more of its affiliated funds, and the transaction would not be subjected to any financing condition.

The Blackstone Group currently holds a 9.99% interest in Crown Resorts. It acquired the stake from Melco Resorts & Entertainment in April 2020. Melco had bought the 9.99% stake from James Packer’s Consolidated Press Holdings one year before but pulled out of a deal that would have allowed it to buy a second tranche.

In February, regulators in New South Wales conducted an independent inquiry which led to a decision by the regulator to declare Crown unsuitable for license in the state. Victoria wasn’t as strict, but Crown still faces a decision in Western Australia. The investigation just wrapped up this week; however, the results won’t be made public until next March.

Blackstone was one of the two largest international investment groups that expressed an interest in Crown this year. Star Entertainment Group, another contender, pulled a merger proposal in August.