Oaktree in April submitted an initial proposal to provide up to $3.00bn in funding for a share buy-back programme. Crown would be able to use the proceeds to buy back some or all of its shares held by Consolidated Press Holdings Pty (CPH) on a selective basis.
The revised proposal sets out details of an increased $3.10bn facility consisting of a $2.00bn private term loan and $1.10bn loan convertible into new shares to be issued by Crown.
Oaktree said the facility would be used to fund a selective buy back of CPH’s shareholding in Crown. The term of the proposed facility is seven years, with a coupon of 6.0% per year payable for the first two years, rising to 6.5% per year from year three until the maturity of the facility.
The convertible component of the facility would allow Oaktree to convert the $1.1bn tranche into new shares in Crown at a strike price of $13.00 in specified circumstances.
The number of new Crown shares that would be issued to Oaktree upon conversion of the convertible component would be capped so that Oaktree would hold a maximum of 9.99% of the total number of Crown shares on issue. The remaining part of the component would be cash settled by Crown.
Any selective buy-back of Crown shares held by CPH would be subject to Crown shareholder approval.
Crown noted that its board has not yet formed a view on the revised proposal.
The resort operator has been the subject of significant interest from investors during recent months, having also received a number of takeover and merger offers.
Rival Australian land-based operator Star Entertainment Group put forward a proposal to merge with Crown and create a combined operation worth approximately $12.00bn, while private equity giant Blackstone Group submitted a takeover offer.
The private equity group then increased its offer to $12.35 in cash for each Crown share, up 4% increase on the previous offer of $11.85 per share submitted, but is lower than both the $14 valuation set by Crown and the cash alternative proposed by Star.
Crown turned down a revised proposal from Blackstone, saying the offer undervalued its business, while the operator requested more information from Star on its bid.