Insights

Crown (ASX:CWN) share price lower despite Oaktree proposal

Crown has received yet another proposal…
The post Crown (ASX:CWN) share price lower despite Oaktree proposal appeared first on The Motley Fool Australia. –

The Crown Resorts Ltd (ASX: CWN) share price is trading lower on Tuesday despite the release of an announcement.

At the time of writing, the casino and resorts operator’s shares are down 1% to $12.12.

What is happening?

This morning Crown revealed that Oaktree Capital Management has come back with an improved offer.

This follows its unsolicited, preliminary, non-binding and indicative proposal in April to provide a funding commitment of up to ~$3 billion to Crown via a structured instrument. The proceeds were to be used by Crown to buy-back some or all of the Crown shares which are held by James Packer’s Consolidated Press Holdings on a selective basis.

Today, Crown revealed that Oaktree has now revised its proposal and is offering a $3.1 billion facility consisting of two tranches. This comprises a $2 billion private term loan and $1.1 billion loan convertible into new shares to be issued by Crown. Once again, it proposes that the proceeds would be used to fund a selective buy back of Consolidated Press Holdings’ shareholding in Crown.

What are the terms?

Crown notes that the term of the proposed facility is seven years with a coupon of 6% per annum for the first two years and then 6.5% per annum for the remainder of the term.

In respect to the convertible component of the facility, it would give Oaktree the ability to convert the $1.1 billion tranche into new shares in Crown at a strike price of $13.00 in specified circumstances. This includes at any time after the first anniversary of the facility provided that the Crown share price is above $13.00 based on a 30-day volume weighted average price.

Furthermore, the number of new Crown shares which would be issued to Oaktree upon conversion would be capped so that Oaktree would hold 9.99% of the total number of Crown shares on issue. The remaining part of the convertible component would be cash settled by Crown.

What now?

The release explains that the Crown Board has not yet formed a view on the merits of the revised Oaktree proposal.

As a result, it has advised shareholders that they do not need to take any action in relation to the proposal at this stage. It also warned that there is no certainty that the proposal will result in a transaction.

Crown is also still considering a merger proposal from rival Star Entertainment Group Ltd (ASX: SGR).

The post Crown (ASX:CWN) share price lower despite Oaktree proposal appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Crown (ASX:CWN) share price slips as royal commission extended
M&A rumour fires up the Iress (ASX:IRE) share price today
ASX 200 drops, Altium soars, Skycity drops, NAB falls

Star (ASX:SGR) share price latest to fall on anti-money laundering investigation
Crown (ASX:CWN) share price under pressure from AUSTRAC enforcement investigation

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!