The Crown Resorts Ltd (ASX: CWN) share price is down 9% after Wynn Resorts Ltd (NASDAQ: WYNN) announced it was walking away from the deal.
Crown Resorts is one of Australia’s largest gaming and entertainment groups. It operates two integrated resorts in Melbourne and Perth. Crown also fully owns and operates Crown Aspinalls in London, one of the high-end licensed casinos in the West End entertainment district. It is currently developing Crown Sydney at Barangaroo.
Why The Crown Resorts Share Price Is Down 8%
Overnight Wynn Resorts gave a press release saying, “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction.”
Wynn Resorts was clearly very serious about the confidential element of the takeover discussions. There a few good reasons why Wynn would want to keep things private, such as wanting to avoid other potential bidders getting organised.
In response to the Wynn announcement, Crown Resorts said in an ASX market release this year: “Crown notes that Wynn has announced that it has terminated all discussions with Crown concerning any transaction.”
Is This Truly The End Of The Crown Deal?
Some investors don’t seem to think so. The Crown Resorts share price is still up 8.6% since the news first broke of the Wynn Resorts takeover bid.
The deal seemed to have been quite well progressed, with advisers being hired and a preliminary potential price per share of $14.75 per share being discussed.
Some Crown shareholders, particularly James Packer, may have been happy to sell out with worries about the viability of Crown’s apartment projects in Melbourne and Sydney because of the falling property prices and the fallout of the Royal Commission with tighter lending requirements.
I think yesterday was the best time to sell Crown shares, not today. Other bidders may yet come out of the woodwork if they know Crown could be up for grabs.
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.