Crown Resorts in ASX trading halt

Daniel Fowler
April 10, 2019

World No. 2 casino operator Wynn Resorts Ltd on Tuesday ended takeover discussions with Crown Resorts, citing a leak of the deal details, hours after confirming it was in talks to buy the Australian rival.

In a tersely worded statement, the Las Vegas casino giant said it was ending all discussions with Crown Resorts.

Packer and Wynn, who stepped down as CEO of Wynn Resorts in 2018, know each other well.

"The discussions between Crown and Wynn are at a preliminary stage and no agreement has been reached between the parties in relation to the structure, value or terms of a transaction".

"Wynn's actions are more likely to reflect a genuine frustration with a breach of the confidential nature of the discussions than an attempt to add pressure to the negotiation", said Angus Gluskie, managing director of White Funds Management, which holds Crown shares.

Just hours after confirming overnight it was in discussions with Crown, the U.S. group issued a second statement saying it had walked away.

A sale along the lines proposed by Wynn would be Australia's biggest M&A deal so far this year.

Crown Resorts, which is controlled by Australian billionaire James Packer's Consolidated Press Holdings, confirmed on Tuesday Wynn proposed to buy the company for $10 billion.

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

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It has attributed the slump slowing economic growth in China, with big gamblers travelling to Australia now less likely to be in the mood to gamble.

Yesterday, it was revealed that Crown was in talks with Wynn Resorts, which has hotels in Las Vegas, Boston and Macau.

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

In 2016, 19 of its staff members were arrested in China on charges of illegally promoting gambling.

Last year Mr Wynn sold his stake in the company and resigned as its chairman and chief executive amid allegations of decades of sexual misconduct, which he has denied.

A court jailed 16 of the defendants, including three Australian citizens, for up to 10 months, with the remaining three released after about a month in detention.

The company's efforts so far have included ramping up promotion of a resort in Japan, a market seen as the next potential goldmine to Macau and a former expansion target for Crown.

The announcement led to a double-digit jump in price in the shares of Crown Resorts, a firm listed on the Australian Securities Exchange.

Mr Packer, son of Kerry, the late billionaire mogul who started one day cricket, owns nearly half of Crown Resorts though his privately held Consolidated Press Holdings Group.

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