International edition
July 16, 2019

After ending talks to buy Crown Resorts

Wynn still interested in 'first-class' casino acquisitions

Wynn still interested in 'first-class' casino acquisitions
While we are not pursuing any acquisitions at this stage, we will, along with all of our competitors I'm sure, be looking at opportunities that you can’t replicate through development," Chief Executive Matt Maddox said.
United States | 05/13/2019

After the Las Vegas gaming giant abruptly pulled out of talks to buy James Packer's Crown Resorts last month, the company's chief executive said it would "always be looking for opportunities" that were "tier-one, first-class assets with licenses that are protected in cities that are global destinations."

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peculation has been rife among the gaming industry that Crown Resorts remains "in play" for a potential buyout that Wynn could eventually decide to return to the negotiating table.

Last month, the Las Vegas-based firm which operates casinos in the United States and Macau, abruptly ended buyout talks with Australia’s largest casino operator when word of a potential takeover was leaked. 

After an Australian newspaper revealed the takeover approach, Crown confirmed the confidential talks and disclosed the price that Wynn was offering, which valued Crown at around USD 7.1 billion buyout.

Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction,” Wynn had said in a written statement.

On Thursday night, chief executive Matt Maddox, Wynn Resorts, did not mention the discussions with Crown but said the company would "always be looking for opportunities" that were "tier-one, first-class assets with licenses that are protected in cities that are global destinations".

"While we are not pursuing any acquisitions at this stage, we will, along with all of our competitors I'm sure, be looking at opportunities that you can’t replicate through development," Mr Maddox said on a conference call with investors.

Wynn Resorts' growth pipeline was "quite robust" and the company’s multi-year capital spend had concluded, Mr Maddox said, "generating lots of free cash flow".

As reported by the Sydney Morning Herald, casino industry insiders said Wynn Resorts would be especially interested in Australia due to its vicinity to Asia, as US-China trade tensions remained unresolved and uncertainty surrounded the renewal of Wynn’s Macau casino licences in 2022.

The world's top casino operators have become increasingly reliant on revenue from so-called VIP programs, aimed largely at Asian high-rollers who can often bet millions of dollars an hour.

In order for a takeover deal to stack up, Macquarie analysts said, it would need to be supported by merger-related savings and increased volumes of international high-rollers being redirected from Asia into Australia.

Several other major casino operators have been suggested as possible bidders for Crown, the country's largest casino company, which runs venues in Melbourne, Perth and London and is shortly to complete a $2.2 billion high-end hotel and casino complex in Sydney’s harbourside Barangaroo.

Among other likely "interested parties", according to Deutsche Bank, are Malaysia's Genting Group and private equity firms. A Genting Group spokeswoman last month said "we have no comments on this matter".

Crown Resorts - which owns casinos in Melbourne, Perth and London and is set to open its $2.2 billion Barangaroo complex in 2021 - is the last remains of the Packer family's once-vast business empire.

Sources close to Mr Packer, Crown's biggest shareholder with a 47 per cent stake, said he had been "disengaged from the Crown Resorts business for some time", and had made it clear he was open to the prospect of a sale.

In the wake of Mr Packer's decision to resign from Crown's board of directors last year to deal with his mental health issues, sources said he was interested in leading an "easier life ... a less-stress life".

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