Operator News
Australia – Wynn pulls the plug on proposed US$7.1bn Crown buyout
By Phil - 9 April 2019
Wynn Resorts has moved quickly to end potential takeover talks with Australia’s biggest casino group Crown Resorts, owner of Crown Melbourne, Crown Perth and the planned Crown Sydney.
It had placed a bid of US$7.1bn for the group on the table but quickly withdrew its offer blaming Crown for the end of the talks. It said: “Following the premature disclosure of preliminary discussions, Wynn resorts has terminated all discussions with Crown Resorts concerning any transaction.”
Crown had previously confirmed: “The discussions between Crown and Wynn are at a preliminary stage. There is no certainty that these discussions will result in a transaction.”
Union Gaming Analyst John DeCree said the deal outlines a ‘get bigger or get bought’ mentality from Wynn.
He said: “While we could easily calculate an accretive scenario for this transaction on a standalone basis, we suspect this move is part of a larger strategy for WYNN that is purely defensive. The Wynn Las Vegas and Macau assets are highly sought after.”
He added that if the company loses its licence in Massachusetts due to a perceived cover-up of its former boss Steve Wynn’s sexual misconduct, it could see the company become the target of potential takeovers itself.
Shares in Crown soared by 21 per cent following the news of Wynn’s interest. The Australian group was a former Macau rival to Wynn before exiting the market a few years ago. It is currently building Sydney’s first six-star luxury hotel resort at Barangaroo South on Sydney Harbour.
The first six-star international hotel to be built in Sydney will only offer VIP gaming. Its target market is expected to be wealthy, Chinese high-rollers, which with its on-going success in Macau, Wynn has a handle on.
James McGlew, Executive Director of corporate stockbroking at Perth-based Argonaut, a Crown shareholder, said: “Price-wise, you’d be looking for a little bit more than this. This is what appears to be the opening salvo.”
