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| US casino giant Wynn ends takeover talks with James Packer's Crown Resorts | US casino giant Wynn ends takeover talks with James Packer's Crown Resorts |
| (about 2 hours later) | |
| Wynn Resorts abruptly ended buyout talks with Australia’s largest casino operator after word of a potential takeover was leaked. | Wynn Resorts abruptly ended buyout talks with Australia’s largest casino operator after word of a potential takeover was leaked. |
| In a tersely worded statement, the Las Vegas casino giant said it was ending all discussions with Crown Resorts. | In a tersely worded statement, the Las Vegas casino giant said it was ending all discussions with Crown Resorts. |
| Earlier in the day, the James Packer-controlled gaming firm had confirmed that it was in acquisition talks with Wynn. | Earlier in the day, the James Packer-controlled gaming firm had confirmed that it was in acquisition talks with Wynn. |
| “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction,” Wynn said in a written statement released on Tuesday in the US. | “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction,” Wynn said in a written statement released on Tuesday in the US. |
| Crown Resorts takeover bid: Wynn makes play for James Packer's casino group | Crown Resorts takeover bid: Wynn makes play for James Packer's casino group |
| Crown, which owns casinos in Melbourne, Perth and London and will soon open another in Sydney, revealed that the offer had an implied value of $14.75 per share, to be paid 50% in cash and 50% in Wynn shares. | Crown, which owns casinos in Melbourne, Perth and London and will soon open another in Sydney, revealed that the offer had an implied value of $14.75 per share, to be paid 50% in cash and 50% in Wynn shares. |
| That offer would have valued Crown at around $10bn. | That offer would have valued Crown at around $10bn. |
| Crown confirmed the development on Wednesday in an ASX statement. | |
| “Crown notes that Wynn has announced that it has terminated all discussions with Crown concerning any transaction,” Crown said. | |
| Wynn’s backtracking illustrates how media leaks of deal talks can test the resolve of potential acquirers. Crown shares jumped as much as 22% on the news. | Wynn’s backtracking illustrates how media leaks of deal talks can test the resolve of potential acquirers. Crown shares jumped as much as 22% on the news. |
| This can make deal negotiations more difficult by emboldening acquisition targets to drive a hard bargain, analysts said. In this case, Wynn’s inexperience with pursuing big deals also likely played a factor, some analysts added. | This can make deal negotiations more difficult by emboldening acquisition targets to drive a hard bargain, analysts said. In this case, Wynn’s inexperience with pursuing big deals also likely played a factor, some analysts added. |
| “[Wynn] management’s experience with acquisitions is limited, so when you target synergies it’ll be nice to have more of a track record for such a large transaction,” said Roth Capital Partners analyst David Bain, calling the termination of the deal talks a positive development for Wynn. | “[Wynn] management’s experience with acquisitions is limited, so when you target synergies it’ll be nice to have more of a track record for such a large transaction,” said Roth Capital Partners analyst David Bain, calling the termination of the deal talks a positive development for Wynn. |
| After the Australian Financial Review revealed Wynn’s takeover approach, Crown not only confirmed the confidential talks on Tuesday, but also disclosed the price that Wynn was offering. It added that Crown’s board had not yet considered Wynn’s latest offer. | After the Australian Financial Review revealed Wynn’s takeover approach, Crown not only confirmed the confidential talks on Tuesday, but also disclosed the price that Wynn was offering. It added that Crown’s board had not yet considered Wynn’s latest offer. |
| Wynn then issued two statements, first confirming the talks, and, a few hours later, stating that they had ended. | Wynn then issued two statements, first confirming the talks, and, a few hours later, stating that they had ended. |
| Crown did say, before Wynn walked away, that there was no certainty of a deal. | Crown did say, before Wynn walked away, that there was no certainty of a deal. |
| Crown’s value has fallen 20% since mid-2018 as profits have fallen short of expectations. It has attributed the slump to slowing economic growth in China, where big gamblers who travelled to Australia are now less likely to be in the mood to gamble. | Crown’s value has fallen 20% since mid-2018 as profits have fallen short of expectations. It has attributed the slump to slowing economic growth in China, where big gamblers who travelled to Australia are now less likely to be in the mood to gamble. |
| Wynn Resorts Ltd runs several casinos in the United States and Macau. Its founder, Steve Wynn, resigned as chairman and chief executive in February 2018 after claims of sexual misconduct, and has sold his stake in the company. | Wynn Resorts Ltd runs several casinos in the United States and Macau. Its founder, Steve Wynn, resigned as chairman and chief executive in February 2018 after claims of sexual misconduct, and has sold his stake in the company. |
| Crown, too, has battled controversy in the past three years. In 2016, 19 of its staff members were arrested in China on charges of illegally promoting gambling. A court jailed 16 of the defendants, including three Australian citizens, for nine-to-10 months, with the remaining three released after around a month in detention. | Crown, too, has battled controversy in the past three years. In 2016, 19 of its staff members were arrested in China on charges of illegally promoting gambling. A court jailed 16 of the defendants, including three Australian citizens, for nine-to-10 months, with the remaining three released after around a month in detention. |
| Soon afterward, Crown signalled a retreat from international expansion plans that included Las Vegas and Macau. That led to a $370 million deal to sell Wynn vacant land in Las Vegas on which Crown had planned to build a casino. | Soon afterward, Crown signalled a retreat from international expansion plans that included Las Vegas and Macau. That led to a $370 million deal to sell Wynn vacant land in Las Vegas on which Crown had planned to build a casino. |
| And in March last year, Crown’s billionaire director Packer resigned from the company’s board, citing mental health issues. | And in March last year, Crown’s billionaire director Packer resigned from the company’s board, citing mental health issues. |
| Packer still owns 46.8% of the company. | Packer still owns 46.8% of the company. |
| Associated Press and Reuters | Associated Press and Reuters |
| Crown Resorts | Crown Resorts |
| James Packer | James Packer |
| Business (Australia) | Business (Australia) |
| Gambling | Gambling |
| news | news |
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