Wynn Resorts Bid on Australian Casino Chain Crown
Casinomultinational Wynn Resorts wants to take over the Australian gambling company Crown Resorts for $7.1 billion.
Someone Leaked too Early
Major shareholder James Packer may cash 2.9 billion dollar. Wynn Resorts has ‘broken off’ all talks about a takeover because of ‘premature disclosure’. Apparently, someone leaked a little too early. In recent months there have been rumours that Wynn Resorts might become a takeover prey, but the American company itself is now attacking with a bid for Australian branch partner Crown Resorts.
New Crown Casino Sydney Under Constriction
Crown is Australia’s largest casino company. It only owns two casinos, in Perth and Melbourne, but they are huge. A new casino complex in Sydney is under construction. The Australian casinos partly rely on large gamblers from China and the rest of Asia. In addition, Crown operates the chic casino club Aspinalls in London.
The Existing 4 Casino Hotels of Wynn Resorts
Wynn Resorts has two spectacular luxury hotel casinos in Las Vegas (Wynn and Encore) and two in the Chinese gambling city of Macau (Wynn Macau and Wynn Palace). Wynn offers $7.1 billion (equivalent to approximately €6.3 billion) for Crown, half in shares and half in cash to accomplish his fifth Casino.
According to Gambling Analyst Margaret Huang
According to gambling analyst Margaret Huang, Wynn can hardly expand in Macao anymore. The company is therefore looking for other opportunities to grow in Asia and the Pacific, she tells business website Bloomberg:
“Wynn’s efforts reflect the needs of Macao operators to strengthen their position in other markets in order to support profit growth on long-term objectives”
Huang also sees a disadvantage:
“Wynn Resorts has plans to build the largest casino in the world in Japan, but if the takeover of Crown goes ahead, it may not have enough money left for that.”
A spokesman for Crown Resorts emphasizes that the deal is far from finished:
“Whether the negotiations will lead to a transaction is not yet certain.
Shareholder James Packer
An important factor is major shareholder James Packer, who owns about 46 percent of the shares in Crown Resorts. On the basis of the current bid, Packer’s stake is worth around 2.9 billion euros, but the takeover will not take place without his approval anyway.
Investors are Optimistic
Investors are in any case optimistic about the chances of success. On the Sydney stock exchange, the Crown Resorts share rose almost 20 percent after the bid was made public.