Blackstone acquired the stake from Macau based Melco Resorts & Entertainment Ltd. (NASDAQ: MLCO) sending shares of Crown Resorts Ltd. (OTC: CWLDF) soaring on hopes of a buyout. After the sale was completed, Melco exited its positions in Crown, in line with casino companies globally who are reigning in spending to mitigate the fallout from the coronavirus shutdowns, reported Reuters.
Blackstone has emerged as a large shareholder in Crown, second-only to its billionaire founder James Packer. Speculation is rife that Blackstone, with its $570 billion assets under management, could buy more or even all of Crown Resorts. Packer’s earlier bid to sell 37% of his stake to Melco was stymied by regulatory hurdles.
Why It Matters
Blackstone picked up 67.7 million shares from Melco at $5.33 each, putting the value of the transaction at $359.04 million.
Crown’s shares have fallen 21% since February 20 when restrictions on movement were mandated, severely impacting industries in public entertainment and tourism, according to Reuters.
James McGlew, executive director of corporate stockbroking at Argonaut, told Reuters, “The sale has certainly stoked the fire of perceived corporate activity in Crown.” He believes that COVID-19 has so weakened the casino and resort sector, its constituents are now easier to “track” as is prey in big game hunting.
Crown Resorts OTC shares rose 30.43% at $6, the company’s shares closed 11.6% higher at $6.25 on Tuesday in Sydney.
Blackstone shares traded 0.37% higher at $51.59 in the after-hours session on Tuesday. The shares had closed the regular session 0.019% higher at $51.40.
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