Crown’s a takeover target

US gaming giant Wynn Resorts makes $10b play

CROWN Resorts shares soared yesterday after the casino operator confirmed talks with Wynn Resorts over a $10 billion cash-and-scrip takeover proposal by the Las Vegas gambling giant.

The James Packer-controlled gaming firm said that while the board had yet to consider Wynn’s proposal, it had an implied value of $14.75 a share.

That represents a 25.6 per cent premium to the stock’s $11.74 price before trade was paused ahead of the announcement.

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

“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 Resorts said in a statement to the ASX. The proposal is 50-50 in cash and Wynn shares.

The Crown Resorts statenecessary ment said that the Wynn proposal was subject to conditions including Wynn obtaining all regulatory approvals and a recommendation by the Crown board.

“It is stated to be preliminary, confidential, non-binding and indicative,’’ Crown said.

Crown, majority owned by Mr Packer’s Consolidated Press Holdings, has operations in Melbourne, Perth, and London, and has a luxury resort development in Sydney’s Barangaroo due to be completed in 2021.

The company has endured a turbulent three-year period in which it retreated from its expansion plans in Las Vegas and Macau, while 19 of its staff were arrested and jailed in 2017 for promoting gambling in China.

Mr Packer (pictured) quit the Crown board in March 2018.

In February, the company reported a 26.7 per cent drop in first-half profit to $174.9 million.

Wilson Asset Management portfolio manager John Ayoub told Fairfax publications that Wynn’s interest in Crown ‘’highlights the demand for these world class assets on the doorstep to Asia’’.

“Valuation disparities between Australian operators versus global peers makes these highly sought after and highly accretive,” Mr Ayoub said.

“We wouldn’t be surprised to see further international interest in other Australian operators like Star Entertainment given that valuation gap.’’