Wynn Resorts says it has ceased its pursuit of Crown Resorts after news of a potential US$7.1 billion acquisition of the Australian casino operator broke on Tuesday morning.
In a statement released overnight, Wynn spokesman Michael Weaver said, “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction.”
Wynn’s withdrawal follows confirmation by Crown Resorts that it was in confidential discussions with the US-based gaming industry giant.
As reported by Inside Asian Gaming early Tuesday, Wynn Resorts had submitted a takeover proposal to Crown to test whether the Australian-listed company’s shareholders would be willing to pursue a takeover deal.
In a filing to the Australian Securities Exchange shortly afterwards, Crown revealed that the proposal suggested an acquisition of Crown by Wynn via scheme of arrangement that would see 50% paid in cash and the remaining 50% in Wynn shares.
“The proposal currently 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.
“At the date of the proposal, the volume weighted average price of Wynn shares implied an exchange ratio of 0.042 Wynn shares per Crown share. The terms of the consideration are yet to be agreed.”
Crown added that it had not yet considered Wynn’s most recent proposal and that any potential takeover would depend on a recommendation by the Crown board and Wynn obtaining all necessary approvals.
“The discussions between Crown and Wynn are at a preliminary stage and no agreement has been reached between the parties in relation to the structure, value or terms of a transaction. There is no certainty that these discussions will result in a transaction,” Crown said.
Crown Resorts operates Crown Melbourne and Crown Perth and is currently developing its luxury AU$2.2 billion Crown Sydney at Barangaroo, due for completion in 2021.
The company has had some prior dealings with Wynn, having sold the company a 34.6-hectare parcel of land adjacent to Wynn Las Vegas on the Las Vegas Strip in December 2017 for AU$300 million. The site had previously been purchased by Crown to build its now defunct integrated resort concept, Alon Las Vegas.