Potential merger involving Wynn and Crown.
Wynn Resorts, a leading casino business based in Las Vegas, is making a multi-billion euro offer to acquire its Australian competitor, Crown Resorts. This potential deal could be one of the biggest mergers in the global gaming industry's history, but its success is still uncertain.
Shares surge
Discussions about the proposed acquisition have already made headlines worldwide. Wynn Resorts has submitted an offer worth USD 7.12 billion (~ EUR 6.31 billion) for Crown Resorts, consisting of a 50% cash payment and the remaining 50% in shares. If the deal goes through, it would need to comply with regulations set by the Australian state of Victoria, where Crown Resorts operates its main operations. The authorities in Victoria have indicated that the new owner must be a suitable gaming operator.
Crown Resorts' shareholders have not yet approved the offer, but the company's stock value has already increased by 26%, valuing it at USD 14.75 per share - a significant rise from its previous closing price (April 8). This increase resulted in Crown Resorts experiencing its largest profit growth in 12 years, with share prices of other Crown shareholders also rising.
James Packer and his struggles
One of the drivers behind the potential acquisition is Crown Resorts' controlling shareholder, billionaire James Packer. Packer, who was once a major media empire owner, has faced political and psychological issues that led him to leave his position in the company. He acquired Crown Resorts in 2007 and transformed it into a gambling group. Packer's Consolidated Press Holdings currently controls a 47% stake in the company, and a takeover could mean a massive payout for him, estimated at USD 3.3 billion (~ EUR 2.97 billion).
Packer has had a challenging few years, with Crown Resorts halting all expansion plans in Las Vegas and Macau, and 19 employees being arrested and jailed for promoting gambling in China's state monopoly. This incident reportedly left Packer "shook." In an interview, he expressed his desire to lead a simpler life, stating that he lost friends, gained weight, and wants to live a solitary life on his polo estate in Argentina.
Asian expansion plans
If the acquisition does go through, Wynn Resorts could use Crown Resorts as a platform to expand its business in Asia. Perth, Sydney, and Melbourne's Crown Resorts' luxury resorts are of special interest to Wynn due to their strategic locations. Wynn is already established in Macau, but limiting its presence to this region while competitors are gaining ground in other Asian countries. For example, Las Vegas Sands and Melco Resorts have casinos in Singapore and Manila, respectively. Melco is also a partner of Crown Resorts.
Gambling operators are currently competing for a license in Japan, which some have called the "next goldmine for international gaming operators." As the current owner of several luxury resorts, Crown Resorts could provide Wynn with a valuable entry into this market.
Rejuvenating Wynn
Wynn Resorts has been in crisis since 2018, following allegations of sexism against its former CEO, Steve Wynn. Wynn was recently fined USD 20 million for negligence and complicity in the Steve Wynn case. The company's Board of Directors has since implemented a "paradigm shift," with half of its members being women.
According to John DeCree, an analyst at Union Gaming Group LLC, the potential acquisition of Crown Resorts can be seen as a defensive move by Wynn to avoid becoming a target for rival companies like Las Vegas Sands or MGM Resorts. DeCree stated that a larger company would be a difficult target for these rivals and that it would deter further takeover attempts. Discussions regarding the deal are still preliminary, with no agreement yet reached on the structure, value, or terms of the transaction. Wynn and Crown have not made any official statements about the negotiation process.
So far, the talks around the proposed acquisition have generated a lot of buzz and curiosity, but time will tell if they will lead to a successful merger. The Australian authorities have hinted at their preference for a suitable gaming operator to acquire Crown Resorts. It will be interesting to see whether Wynn Resorts meets this criterion and if the deal will ultimately go through.
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Source: www.onlinecasinosdeutschland.com
