Wynn Resorts has made a big move in attempting a US$7.1 billion cash and stock buyout of major Australian IR operator Crown Resorts.
Shares in Crown Resorts soared almost 20% in Australia on Tuesday after the operator confirmed that it had been approached by Wynn Resorts.
The precise terms of the transaction are yet to be agreed, and it is subject to a number of conditions including due diligence, Wynn obtaining all necessary regulatory approvals, and a recommendation by the Crown board, which has not yet discussed the proposal.
“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,” Crown said in a press release.
Analysts at Union Gaming said they saw the move as defensive: “While we could easily calculate an accretive scenario for this transaction on a standalone basis, we suspect this move is part of a larger strategy for Wynn that is purely defensive,” analyst John DeCree. “The Wynn Las Vegas and Macau assets are highly sought after.”
The acquisition would also give Crown access to the Macau market, which it exited about two years ago after breaking up its joint venture with Melco Resorts & Entertainment. The China connection may also help Crown with its ambitions in Sydney, where it is building an ultra-luxury resort targeting Asian VIPs. (AGB)