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Crown back on for Wynn?

Tue, May 21, 2:25pm by Staff Writer

Crown Resorts could be back front and centre in the sights of Wynn according to Share Café.

Wynn revealed last Friday that it was looking to sell its nearly completed US$2.6 billion casino in Boston to MGM International.

After abandoning its bid for Crown last month, it announced the sale in a statement with MGM.

Wynn was awarded its Massachusetts licence in 2013, allowing it to build the 671-room Encore Boston Harbour that is expected to open in late June.

The possibility of a deal is uncertain because MGM already owns a casino in Massachusetts, with state law not allowing one company to own more than one casino licence in the state.

The Massachusetts Gaming Commission fined Wynn Resorts US$335 million in April for not revealing sexual misconduct allegations against founder and former chief executive officer Steve Wynn, but allowed the company to keep its licence.

Wynn has to pay the fine by May 31 and some media in Boston speculate the talks could be a way of delaying the payment.

Wynn pulled a preliminary offer to Crown Resorts in April, blaming the early leaking of the possible offer to the media.

Wynn had proposed a $14.75 offer for Crown – the $10 billion value would be half in cash, half in Wynn shares.

Billionaire James Packer’s Consolidated Press owns 46.8 per cent of Crown and he would have emerged with a bit stake in Wynn.

Crown shares fell 2.2 per cent last week to end at $12.93 on Friday on the ASX.

A successful sale of the Boston casino would raise a lot of cash for Wynn and give it the firepower to go after Crown.

Wynn shares fell more than 4.6 per cent on Friday to US$121.20.

Crown sale off the table as Wynn pulls out

The $10 billion proposed bid for Crown Resorts by US gaming giant Wynn Resorts survived only 24 hours before Wynn killed it off, citing its premature disclosure as the motivation for walking away, the Sydney Morning Herald reports.

In a terse statement issued just hours after the companies confirmed they were in talks, Wynn Resorts said it was ending discussions with its Australian rival.

“Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction,” the company said in a statement on Tuesday morning in the US.

Crown Resorts is controlled by Australian billionaire James Packer, who earlier issued a statement saying Wynn had proposed to buy the company in a $10 billion cash and stock deal.

Wynn also released an SEC filing on Tuesday to say that Crown Resorts had issued a press released “about confidential discussions”.

Wynn and Crown, and probably more particularly Wynn and James Packer, had clearly had confidential conversations over the weeks and months leading up to Tuesday’s confirmation by Crown of reports of the deal.

The fact that Crown implied there had been a proposal at a lower price than the $14.75 a share cash and scrip offer it outlined on Tuesday supports that conclusion.

Presumably, Wynn had hoped to lock down the final price and terms of an agreed deal – it had to be agreed because Wynn wanted to execute it via a scheme of arrangement- before it was announced to the market, its shareholders and its regulators.

Instead, the leak – which interacted with the ASX’s continuous disclosure regime to force Crown to disclose the fact of the proposal and the outline of its terms – meant it had an incomplete deal, with no certainly as to final price or terms, or indeed, success.

The Las Vegas casino giant confirmed it was in preliminary discussions but that no agreement had been reached and “there is no assurance that these discussions will result in a transaction.”


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