{"id":4253,"date":"2019-04-09T13:49:30","date_gmt":"2019-04-09T18:49:30","guid":{"rendered":"http:\/\/planesintheair.com\/?p=4253"},"modified":"2019-04-09T13:49:32","modified_gmt":"2019-04-09T18:49:32","slug":"wynn-ends-acquisition-talks-with-australias-crown-resorts","status":"publish","type":"post","link":"https:\/\/planesintheair.com\/?p=4253","title":{"rendered":"Wynn Ends Acquisition Talks with Australia’s Crown Resorts"},"content":{"rendered":"\n
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FILE PHOTO – The logo of Australian casino giant Crown Resorts Ltd adorns the hotel and casino complex in Melbourne, Australia, June 13, 2017. REUTERS\/Jason Reed\/File Picture <\/figcaption><\/figure>\n\n\n\n

(Reuters)\n – Wynn Resorts Ltd, the world’s No. 2 casino operator, said on Tuesday \nit scrapped preliminary talks to acquire Crown Resorts Ltd for A$10 \nbillion ($7.1 billion), after the Australian Financial Review broke news\n of the negotiations.<\/p>\n\n\n\n

Wynn’s\n backtracking illustrates how media leaks of deal talks can test the \nresolve of potential acquirers. Crown shares jumped as much as 22 \npercent on the news to A$14.37, close to the $A14.75 per share level \nthat Crown said Wynn’s latest cash-and-stock offer valued the company.<\/p>\n\n\n\n

This\n can make deal negotiations more difficult by emboldening acquisition \ntargets to drive a hard bargain, analysts said. In this case, Wynn’s \ninexperience with pursuing big deals also likely played a factor, some \nanalysts added.<\/p>\n\n\n\n

“(Wynn)\n management’s experience with acquisitions is limited, so when you \ntarget synergies it’ll be nice to have more of a track record for such a\n large transaction,” said Roth Capital Partners analyst David Bain, \ncalling the termination of the deal talks a positive development for \nWynn.<\/p>\n\n\n\n

After\n the Australian Financial Review revealed Wynn’s takeover approach, \nCrown not only confirmed the confidential talks on Tuesday, but also \ndisclosed the price that Wynn was offering. It added that Crown’s board \nhad not yet considered Wynn’s latest offer.<\/p>\n\n\n\n

Wynn then issued two statements, first confirming the talks, and, a few hours later, stating that they had ended.<\/p>\n\n\n\n

“Following\n the premature disclosure of preliminary discussions, Wynn Resorts has \nterminated all discussions with Crown Resorts concerning any \ntransaction,” the company said in a statement.<\/p>\n\n\n\n

Wynn’s shares were down 3.2 percent at $140.21 in New York at mid-afternoon.<\/p>\n\n\n\n

Examples\n of companies confirming acquisition talks only to back out hours later \nare few and far between, because they reflect a lack of conviction on \nthe part of the aspiring acquirers.<\/p>\n\n\n\n

Last\n year, drug maker Allergan Plc confirmed it was in the early stages of \nmaking an offer for peer Shire Plc, after Reuters broke news of the \ndeliberations, only to issue a second statement a few hours later \nstating it would not make an offer.<\/p>\n\n\n\n

Insurer\n Aon Plc said last month it would not pursue a merger with rival \ninsurance brokerage Willis Towers Watson Plc, a day after it confirmed \nit was in early stages of considering an all-stock offer for the Irish \ncompany following a Bloomberg News report revealing the deliberations.<\/p>\n\n\n\n

HEDGE AGAINST MACAU<\/strong><\/p>\n\n\n\n

Wynn\n was founded in 2002 by Steve Wynn, who started his casino business in \nLas Vegas in the 1960s and created some of the city’s most iconic \nlandmarks \u2013 the Mirage, Bellagio and Treasure Island – before selling \nthem. Beset by sexual misconduct allegations, Wynn left the company and \nsold his entire 11.8 percent stake in Wynn Resorts for $2.1 billion last\n month.<\/p>\n\n\n\n

Wynn\n operates large resort-and-casino complexes in Las Vegas and Chinese \ngambling hub Macau, with another under construction in Massachusetts. \nThe deal would have offered a hedge against Macau, where its licences \nare up for renewal, by giving it two lavishly revamped Australian \ncasinos and a third being built on the prized Sydney harbour front.<\/p>\n\n\n\n

Buying\n Crown would also fit in with Wynn’s strategy to diversify \ngeographically to protect its growth prospects if its Macau licences are\n not renewed.<\/p>\n\n\n\n

The\n company’s efforts so far have included ramping up promotion of a resort\n in Japan, a market seen as the next potential goldmine to Macau and a \nformer expansion target for Crown.<\/p>\n\n\n\n

“Wynn\n has typically grown through building their own facilities, not through \nacquisition,” said Bain, the Roth Capital Partners analyst.<\/p>\n\n\n\n

For\n Crown’s 47 percent owner James Packer, who re-badged his father’s media\n empire as a gambling concern in 2007 only to withdraw from business \nengagements last year due to mental illness, the deal would have ended \nhis career as a casino mogul with a A$4.7 billion payout.<\/p>\n\n\n\n

He\n would have ended up as Wynn’s biggest shareholder with 9.8 percent of \nits shares, based on its current number of shares on issue.<\/p>\n\n\n\n

“We\n think Wynn’s strategy was mostly defensive, but if they have a strong \nstrategic rationale for wanting to acquire Crown, they would likely come\n back to the table when things settle down,” said John DeCree, Union \nGaming Securities’ director of North America research.<\/p>\n\n\n\n

(Reporting by Byron Kaye, Tom Westbrook and Paulina Duran in SYDNEY, Devika Syamnath and Nivedita Balu in BENGALURU, and Greg Roumeliotis in NEW YORK; Editing by Sriraj Kalluvila, Shounak Dasgupta and Richard Chang)<\/p>\n\n\n\n

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(Nattee Chalermtiragool\/Shutterstock)\rstock-Wynn-Macau-01-shutter\rMacao, China – March 12, 2016: View of Macao city at night in Macao, China<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Wynn Resorts Ltd, the world’s No. 2 casino operator, said on Tuesday it scrapped preliminary talks to acquire Crown Resorts Ltd for A$10 billion ($7.1 billion), after the Australian Financial Review broke news of the negotiations.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3448,2203,1770,1397,1103],"tags":[3934,3648,4099,4102,1480,876,4108,1942,4097,2390,232,1558,3404,655,4110,3888,4098,4094,2514,4111,3440,2758,1125,4101,2006,808,973,2296,2421,4095,4106,2685,412,2295,1090,231,2294,1288,4096,3276,2275,4100,3061,1756,2579,4105,4109,4107,1539,4103,4104,233],"class_list":["post-4253","post","type-post","status-publish","format-standard","hentry","category-casino-news","category-finance-news","category-hotel-news","category-stock-news","category-travel-news","tag-acquire","tag-acquisition","tag-allergan","tag-aon","tag-australia","tag-australian","tag-bellagio","tag-bloomberg","tag-broke","tag-capital","tag-casino","tag-chinese","tag-close","tag-company","tag-complex","tag-crown","tag-drug","tag-ends","tag-financial","tag-front","tag-gambling","tag-harbour","tag-hub","tag-insurer","tag-island","tag-japan","tag-las","tag-macau","tag-maker","tag-melco","tag-mirage","tag-negotiations","tag-news","tag-operator","tag-partners","tag-resort","tag-resorts","tag-reuters","tag-review","tag-roth","tag-shares","tag-shire","tag-steve","tag-sydney","tag-talks","tag-towers","tag-treasure","tag-value","tag-vegas","tag-watson","tag-willis","tag-wynn"],"_links":{"self":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/4253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4253"}],"version-history":[{"count":2,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/4253\/revisions"}],"predecessor-version":[{"id":4258,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/4253\/revisions\/4258"}],"wp:attachment":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}