One of the biggest gambling firms in the world, Wynn Resorts Ltd., has left the negotiating table from a planned acquisition of Crown Resorts. The media is blamed for the abrupt exit of the American firm from acquiring the Australian counterpart.
Everything was on track between the two firms. If they had struck a deal, it would have become one of the biggest acquisition deals as far as the gambling industry In Australia. The rumored negotiation price quoted by Wynn Resorts was US$7.1 billion or AU$10 billion. However, the media leaked the developing story, and this made the American firm to take a step backward.
Wynn Resorts did not appreciate the confirmation given by Crown about the confidential discussions. The reason given by the latter is ‘premature disclosure.’
The development suggests that confidentiality has become a key factor for any business deals to sail through. On Tuesday, the Australian Financial Review reported that the two firms are negotiating for a possible merger.
What is more surprising to Wynn Resorts is the proposed price for Crown Resorts. Based on the press statement, the offer represented AU$14.75 a share. This was to be paid 50 % in cash and the rest in Wynn Resorts shares. This offer meant the company is valued about US$7.12 billion or AU$9.99 billion.
The American firm’s interest in Crown Resorts is due to several factors. For instance, the company has casinos in Melbourne and Perth in Australia apart from London. Aside from these, the company is planning to launch a fresh gaming venue in Sydney involving a cost of AU$2.2 billion. The company faced some setbacks in the past due to the scandal in 2016 that led to arrest its employees in China for promoting illegal gambling.
Following this, Crown had canceled its expansion plans in Las Vegas and Macau. The company also sold the land in Las Vegas. Incidentally, Wynn Resorts has acquired this property for about $263.5 million or AU$370 million.
Wynn Resorts sees opportunity beyond Macau and is keen to expand in global markets. The company is also trying to get an operating license in Japan. Though the company has left the negotiating table, this development will bring in other major players into the negotiations.