Published: Wed, April 10, 2019
Money | By Ralph Mccoy

Crown Resorts in ASX trading halt

Crown Resorts in ASX trading halt

However, Crown shares leapt more than 20 per cent on news of the talks to be $2.42 higher at $14.16 as at 9.05am.

"(Wynn) management's experience with acquisitions is limited, so when you target synergies it'll be nice to have more of a track record for such a large transaction", said Roth Capital Partners analyst David Bain, calling the termination of the deal talks a positive development for Wynn.

Crown said the talks with Wynn were at a preliminary stage and no agreement on value or structure had been reached.

Buying Crown would also fit in with Wynn's strategy to diversify geographically to protect its growth prospects if its Macau license are not renewed.

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.

However, the USA company said on Tuesday afternoon: "Following".

The James Packer-controlled gaming firm, which includes Perth's Burswood Casino, said that while the board had yet to consider Wynn's proposal, it had an implied value of $14.75 per share.

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A Wynn spokesman declined to comment.

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.

The sale at the current proposed price would fetch about A$4.7 billion for Packer, who in addition to Crown quit 22 company directorships previous year in a remarkable retreat for the scion of a family which had been a fixture of corporate Australia most of the 20th century.

The company has since closed nearly all its regional marketing offices in Asia, which funneled big-stakes players to Australia, and sold out of a Macau casino venture.

"We think Wynn's strategy was mostly defensive, but if they have a strong strategic rationale for wanting to acquire Crown, they would likely come back to the table when things settle down", said John DeCree, Union Gaming Securities' director of North America research. Mr Packer quit the Crown board in March 2018. In February 2018, founder and former Chief Executive Officer Steve Wynn stepped down following reports that he sexually harassed a number of employees over his career.

-With assistance from Angus Whitley and Daniela Wei.

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