Crown shares tumble after Wynn cancels $7.1 billion casino takeover

Crown shares tumble after Wynn cancels $7.1 billion casino takeover

Australian casino giant Crown Resorts said on Tuesday it had received an indicative A$10 billion ($7.1 billion) takeover offer from Las Vegas's Wynn Resorts, sending Crown's shares soaring as investors bet on an even higher bid.

Wynn has now ended the discussions - with the company's executives apparently angered by Crown's decision to reveal the talks to the media.

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

Wynn shares fell as much as 4.7 percent, the most since February 14, in NY trading Tuesday.

"Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction", Las Vegas-based Wynn said Tuesday.

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

News of Wynn's approach sent Crown shares surging more than 20 per cent on Tuesday, adding as much as $800 million to Mr Packer's holding in the company, which owns Perth's Burswood casino and hotel complex on the banks of the Swan River.

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Crown did say, before Wynn walked away, that there was no certainty of a deal.

"The proposal now contemplates acquisition consideration with an implied value of AU$14.75 per share with the exchange ratio being fixed, using a volume weighted average price for Wynn shares, immediately prior to the announcement of an agreed transaction", Crown explained. 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 sold its interests in joint-venture casinos in Macau soon after.

Crown Resorts operates Crown Melbourne and Crown Perth and is now developing its luxury AU$2.2 billion Crown Sydney at Barangaroo, due for completion in 2021. Crown largely retreated from overseas markets after a crackdown in China in late 2016 that resulted in 19 current and former Crown staff being convicted of illegally promoting gambling on the mainland, receiving jail terms of as long as 10 months.

Crown is expected to respond before trading in its shares resumes in Australia on Wednesday.

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.

Soon afterward, Crown signaled a retreat from worldwide expansion plans that included Las Vegas and Macau.

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