Earlier today, the Australian casino company Crown Resorts revealed that it had received an indicative takeover bid from the US gambling operator Wynn Resorts. As revealed by the gambling giant, the acquisition offer amounts to AU$10 billion.
A possible takeover would put an end to the 12-year march of Crown’s majority owner James Packer into casinos, despite he officially left the operator’s board in 2018 due to mental health issues.
On the other hand, Las Vegas-based Wynn Resorts would get a foothold in the Australian gambling market which is currently popular among Chinese tourists. Despite the fact that there has been a downturn in the number of Chinese customers’ spending, the US gambling brand would definitely benefit from the purchase.
According to the executive director of Argonaut Ltd corporate stockbroking agency James McGlew, who is also a shareholder in Crown Resorts, the company would have probably look for a bit more than the offer made. Still, he shared a belief that would be “the opening salvo” of the deal.
A sale at a price around the one offered by Wynn Resorts would be the largest merger and acquisition deal in Australia so far in 2019. Crown Resorts has revealed that the negotiations regarding the possible acquisition were at a very early stage and no agreement on a takeover structure or value had been reached yet. As Reuters reported, a spokesman for Wynn Resorts refused to make comments on the mater.
Wynn Resorts Would Get the Chance to Lay Foot in Australia
According to estimates, the sale at the initially proposed price of AU$10 billion would bring approximately AU$4.7 billion for James Packer, who owns 47% in the company. In addition to the Crown Resorts’ board, Packer also quit 22 company directorships in 2018.
Apart from that, the takeover deal would provide Crown shareholders with financial relief for their investment, especially considering the scandalous arrests of 18 of their staff members in China for breaking casino marketing legislation. Since then, Crown Resorts has decided to withdraw from its expansion plans in Asia, where it had also faced the tough competition of Wynn Resorts in Macau. Due to the fact it pulled back its operations from the world’s largest gambling hub, the Australian gambling company still relied on the profit received from Chinese high-rollers who came to Australia to gamble.
If the takeover is completed, Wynn Resorts would be put in charge of one of the largest gambling developments on the territory of the country, the AU$2.2-billion Barangaroo luxury casino venue situated on the Sydney waterfront, which has been regarded to as the engine of future growth for the Crown Resorts brand.
For the time being, Wynn Resorts owns properties in the US and Macau. In 2018, it has released an extremely large promotion of a resort in Japan, a market which is believed to have great potential as a leading gambling hub on a global scale. The Japanese gambling sector has previously been one of the expansion targets for Crown Resorts.
- Author
Olivia Cole
