“This provides Star with a significant value-creation opportunity without having to independently bid for Crown,” he said.

Mr Carducci added that the probity approval, which is expected to take at least a year for Blackstone, could also be completed quicker with Star as the operator, given it is already cleared to operate in NSW and Queensland.

One shareholder, who asked not to be named so they could speak freely, said Star could not afford the $8 billion-plus needed to buy its rival outright, and that Crown’s shareholders including 37 per cent owner James Packer would want a cash payout rather than the scrip Star would offer in a merger.

“So what can Star do from here? It’s probably go and try to join with Blackstone,” the shareholder said.

Blackstone owns and operates the Cosmopolitan casino in Las Vegas and owns the properties at the nearby Bellagio and MGM Grand. It leases them both to operator MGM. That is an increasingly common model in the casino industry globally.

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Credit Suisse analyst Larry Gandler said Blackstone’s $11.85 a share bid was “opportunistic” given the regulatory overhang and ongoing impact of COVID-19 on Crown’s share price. He estimated the most Blackstone could pay is $13.50 per share, based on its funds’ targeted investment returns, but said it was unlikely other suitors would come to the table.

US casinos were focused on online growth and Asian casinos would struggle to get probity clearance in Australia, he said. The analyst also noted that Mr Packer’s Consolidated Press Holdings, which owns 37 per cent Crown and will be a kingmaker in any deal, agreed to sell 20 per cent of the company to Hong Kong’s Melco Resorts in May 2019 for $13 a share.

“There is little reason to think CPH would expect more than $13 today,” Mr Gandler said.

After jumping 21 per cent on Monday after Crown confirmed Blackstone’s offer, the group’s shares fell 1 per cent on Tuesday to close at $11.85. Star’s share rose 3 per cent on Monday and closed 2.76 per cent lower on Tuesday at $3.88.