No Deal for Wynn
Wynn Resorts Ltd. abruptly called-off discussions over a potential $7.1 billion offer for Australia’s Crown Resorts Ltd. Tuesday, saying the takeover target had prematurely disclosed their talks. Less than a day after Crown Resorts surprised industry watchers by announcing that Wynn Resorts had offered 14.75 Australian dollars (US$10.51) a share, Wynn took the deal off the table.
“Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transactions,” the company said in a statement released four hours after a separate statement had confirmed the talks.
Wynn Resorts executives were caught off-guard when Crown disclosed the talks, as Wynn hadn’t been ready to do so, a person familiar with the matter said. “I was surprised, and the U.S. folks were surprised,” the person said. The deal would have given the Las Vegas giant a foothold in its second international market, underscoring how casinos are looking beyond the traditional gambling hub of Macau to attract lucrative Asian high rollers.
Wynn currently runs casinos only in the U.S. and Macau, the southern Chinese territory that is the epicenter of global gaming. Analysts said a move into Australia by Wynn would have complemented its existing business, giving it another option to offer potential VIPs amid concerns that spending on gambling in Macau could fall due to a slowing Chinese economy.
Macau casinos bring in more than five times the annual revenue of casinos in Las Vegas. The contribution from high-rollers to global gaming sits at around 50%, according to data from Union Gaming, an investment bank focused on the sector. That figure has trended lower since 2011, when VIP players accounted for roughly three-quarters of revenue.