Wynn ends Crown talks after premature disclosure

Tuesday 9th of April 2019

Wynn Resorts has taken its offer for Crown Resorts off the table, according to media reports, just a day after confirmation of a potential takeover sent shares in the Australian operator soaring almost 20 percent.

The deal would have been worth a possible $10 billion ($7.1 billion).

Las Vegas-based Wynn said in a statement on Tuesday morning that “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction.”

The proposal had involved an acquisition of Crown by Wynn via a scheme of arrangement for a combination of 50 percent cash and 50 percent Wynn shares with an implied value of A$14.75 per share, a 26 percent premium to the share price before the bid was announced.

The exchange ratio was fixed using a volume weighted average price for Wynn shares, immediately prior to the announcement of an agreed transaction.

Goldman Sachs and UBS were acting as financial advisers and Ashurst as legal adviser to Crown.

Analysts at Union Gaming said they saw the move as defensive.

“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,” analyst John DeCree. “The Wynn Las Vegas and Macau assets are highly sought after.”

The acquisition would also give Crown access to the Macau market, which it exited about two years ago after breaking up its joint venture with Melco Resorts & Entertainment. The China connection may also help Crown with its ambitions in Sydney, where it is building an ultra-luxury resort targeting Asian VIPs.