Economy

James Packers’ Crown casino in takeover talks with Las Vegas’ Wynn Resorts

James Packers’ Crown casino in takeover talks with Las Vegas’ Wynn Resorts

Wynn Resorts has abruptly pulled out of a proposed $10 billion takeover tilt for James Packer's Crown Resorts, angry at Tuesday's leaking of the bid talks.

In a tersely worded statement, the Las Vegas casino company said it was ending all discussions with its Australian rival.

News of Wynn's interest was first broken by Australian Financial Review on Tuesday and confirmed by Crown, which also disclosed Wynn's offer price.

Packer and Wynn, who stepped down as CEO of Wynn Resorts in 2018, know each other well.

The shares surged by as much as 22 per cent to $14.33 and were still more than 20 per cent higher at 11.15am Sydney time.

'Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction, ' a Wynn spokesperson said in a written statement.

Just hours after confirming overnight it was in discussions with Crown, the USA group issued a second statement saying it had walked away.

Crown on Tuesday had described Wynn's proposal as consisting of 50 percent cash and 50 percent Wynn shares, describing the talks on a "potential change of control transaction" as being at a "preliminary stage".

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For Wynn, the deal would give the world's second-largest casino company a foothold in a market popular with Chinese tourists, although a recent downturn in Chinese consumer spending has constrained Crown's revenue and share price.

It has attributed the slump slowing economic growth in China, with big gamblers travelling to Australia now less likely to be in the mood to gamble.

Crown Resorts operates Crown Melbourne and Crown Perth and is now developing its luxury AU$2.2 billion Crown Sydney at Barangaroo, due for completion in 2021.

Last year Mr Wynn sold his stake in the company and resigned as its chairman and chief executive amid allegations of decades of sexual misconduct, which he has denied.

Crown Perth is WA's biggest single-site employer with as many as 5000 people employed across the casino and its three hotels.

A court jailed 16 of the defendants, including three Australian citizens, for up to 10 months, with the remaining three released after about a month in detention.

Unlike its competitors who already have footholds elsewhere in Asia - from Las Vegas Sands Corp.'s Singapore resort to Melco Resorts & Entertainment Ltd.'s City of Dreams in Manila - Wynn is now confined to Macau, where expansion is approaching its limit.

Wynn is best associated with its founder, USA billionaire Steve Wynn, who stepped down from his positions at the company previous year and quit his shareholding after allegations of sexual misconduct.