JPM has weighed in on the investment debate.

Key points:

  • Crown shares are now trading back up near 52-week highs after rebounding last year
  • JP Morgan has weighed in and reckons there is exciting times ahead for Crown
  • The broker values the company at $15 per share and reckons Star Entertainment might get involved in the takeover debate once again
  • The Crown share price has climbed more than 22% in the last year

Shares in gaming and entertainment giant Crown Resorts Ltd (ASX: CWN) are edging lower today and now trade less than 1% in the red at $12.52.

The Crown share price has made a gradual recovery from its single year lows back in August, having emerged relatively unscathed from a series of scandals last year.

Crown is now trading up near its 52-week highs once more, having marched its way up the steps from its lows.

Now the team at JP Morgan has stepped into the ring and weighed in on the Crown investment debate as well. Here’s what the leading broker had to say about the outlook for Crown investors.

What’s JPM saying about the Crown saga?

The broker released a report entitled “Fourth Round Bell: off the ropes to talk about knockout price”, outlining its view on the bid to purchase Crown’s assets.

The bidder, as it turns out, is the asset management and private equity giant Blackstone, which recently revised its offer to $13.10 per share up from $12.50 last year.

Previously Crown’s board was unwilling to engage in any takeover or buyout proposals, however, the question on its willingness to participate in talks has now been removed according to JP Morgan.

Analysts at the firm say that “rigor remains” behind its $15 price target, however, “given the value of the real estate has always been of a highest & best use nature, there remains plenty of value to unlock”.

The firm also says that Crown has “fewer skeletons in the closet than feared” seeing as Blackstone was granted “non-public due diligence”.

Moreover, seeing the bidder increase its offer by circa 5% alleviates the fear of any lingering surprises. With this newfound momentum, JPM reckons that Crown’s prior hesitance on engaging has now changed, and now believes The Star Entertainment Group Ltd (ASX SGR) “is still likely to get involved”.

As previously reported by The Motley Fool, all eyes will be on Star in the coming periods following the withdrawal of its competing offer last year.


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