Star Entertainment Group Ltd. withdrew its $9 billion merger offer with Australian casino operator Crown Resorts Ltd. because of concerns its rival might lose its license in Melbourne.
Crown shares closed at A$10.02, or up a fraction from the day's open of A$10.01, in Sydney trading Friday. The stock price has fallen by around a quarter from a May peak in May.
In a filing Friday, Star Entertainment said there had been limited engagement with Crown since it first proposed the merger May 10. If successful, the consolidation would have created a $12 billion gambling entity.
Star also said that issues raised at Victoria's Royal Commission into Crown Melbourne have the potential to materially affect the value of the latter, according to Market Watch.
Star said it was open to discuss other "value enhancing opportunities with Crown" in the future but would closely monitor the Royal Commissions currently underway in Victoria and Western Australia.
In response, Crown issued a note to the ASX, saying it remained "willing to engage with Star in connection to a potential merger" on terms acceptable to both parties, Bloomberg said.
Earlier this week, the Royal Commission's lead attorney said Crown should not be granted Victoria's sole casino license because of evidence it engaged in illegal activities.
Counsel assisting the investigation, Adrian Finanzio, said Crown's chief executive Xavier Walsh and executive chair Helen Coonan were not suitable to lead the company's reform.
Star owns and operates Treasury Brisbane, The Star Gold Coast, The Star Sydney and is developing the A$3.5 billion ($2.6 billion) Queen's Wharf development in Brisbane.
Crown has admitted it had underpaid tax, its accounts used for money laundering, and its overseas junket operations infiltrated by organized crime in Asia.
The Royal Commission is expected to hand down its recommendations by Aug. 1. Crown's lawyers will deliver their closing arguments early next month.
