Casino giant abruptly 'walks away' from Crown takeover talks

Mae Love
April 10, 2019

Wynn's shares were down 3.5 percent after the termination, while Crown Resorts shares closed almost 20 percent higher at A$14.05, but below the proposed buyout price of A$14.75.

The Wynn cash-and-shares proposal sent Crown shares soaring by a fifth in Sydney on Tuesday, increasing the value of Mr Packer's stake by A$700m.

"Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction", the firm said in a statement.

However, an agreed bid had not been finalised on the deal that would have seen Packer - who has a 46.1 per cent stake in Crown - walk away with about $2 billion and a 10 per cent stake in Wynn Resorts.

The site had previously been purchased by Crown to build its now defunct integrated resort concept, Alon Las Vegas.

Buying Crown would also fit in with Wynn's strategy to diversify geographically to protect its growth prospects if its Macau licenses are not renewed.

Union Gaming Group LLC analyst John DeCree said that the acquisition was likely a defensive move on Wynn's part, in order that it not become a takeover target for rivals like Las Vegas Sands or MGM Resorts International. "There is no certainty that these discussions will result in a transaction", Crown said.

A Wynn spokesman declined to comment.

"I was surprised and the United States folks were surprised", the person said.

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A sale would mark an end to Crown 47-percent owner James Packer's 12-year foray into casinos after he re-badged his father's media empire as a gambling concern in 2007.

Crown sold its interests in joint-venture casinos in Macau soon after.

The sale at the current proposed price would fetch about A$4.7 billion for Packer, who in addition to Crown quit 22 company directorships past year in a remarkable retreat for the scion of a family which had been a fixture of corporate Australia most of the 20th century.

In the 2017 interview, Packer also said he wanted a more "simple life" and acknowledged he'd lost friends, put on weight and had led a reclusive life at his polo estate in Argentina.

Crown's value has fallen 20 per cent since mid-2018 as profits have fallen short of expectations.

Under its current structure, the transaction would make Packer a significant shareholder in Wynn.

Wynn Resorts has had its share of high-profile trouble.

Wynn is best associated with its founder, USA billionaire Steve Wynn, who stepped down from his positions at the company a year ago and quit his shareholding after allegations of sexual misconduct. He later sold all his holdings in the company.

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