Loose lips sink ships, Wynn ditches $10 billion Crown takeover
Written on the 10 April 2019 by David Simmons
Just one day after the soft announcement of a $10 billion takeover of Crown Resorts (ASX: CWN) by Las Vegas based Wynn Resorts the latter has terminated all discussions about the transaction.
The American resort chain released a short statement on Tuesday (US time) saying that the sudden and early announcement of the potential takeover pushed talks to come to an end.
"Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction," says Wynn.
The confirmation that the two parties were in discussions about a transaction came yesterday from Crown following media speculation around the potential deal.
The proposal from Las Vegas-based Wynn was worth around $10 billion and would have involved a 50-50 cash-scrip deal with an implied value of $14.75 per share.
Crown this morning confirmed to the ASX that Wynn has terminated discussions about the transaction and that it will not go ahead.
The shock decision to ditch the takeover will likely disappoint shareholders. Yesterday shares in Crown shot up 22 per cent on the back of the takeover announcement.
Shares in Wynn Resorts have dipped following the sudden announcement, with WYNN down 3.86 per cent.
Similarly, Crown is down 8.54 per cent to $12.85 per share at 11.54am AEDT.
If completed, Wynn would have grabbed a slice of the Australian gambling market which is the second largest for gambling revenue based on visitors, though still eclipsed by Macau.
However, the advantage of the Australian market is its close proximity to Asia and the high rollers that travel to places like Australia to gamble.
Further, Australians suffer from the largest gambling losses per adult out of all nationalities.
The takeover announcement and termination comes over a year after James Packer stepped down as a director of the resort empire, citing mental health issues as the reason for his departure.
Business News Australia
Author: David Simmons