Australian businessman James Packer has seen a major deal fall through. Photo/Getty Images.
Australian businessman James Packer has seen a major deal fall through. Photo/Getty Images.
A $10 billion takeover deal between James Packer-backed Crown Resorts with Las Vegas gambling giant Wynn Resorts has fallen through because details of it were leaked to the media.
Yesterday, it was revealed that Crown was in talks with Wynn Resorts, which has hotels in Las Vegas, Boston and Macau.
"Crown confirms that it is in confidential discussions with Wynn regarding a potential change of control transaction following approaches to Crown by Wynn," Crown said in a statement released to the ASX.
However, an agreed bid had not been finalised on the deal that would have seen Packer — who has a 46.1 per cent stake in Crown — walk away with about $2 billion and a 10 per cent stake in Wynn Resorts.
Wynn has now ended the discussions — with the company's executives apparently angered by Crown's decision to reveal the talks to the media.
"Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction," Wynn said in a statement released overnight.
The Wall Street Journal spoke to a source who said Wynn executives were shocked by the Crown announcement.
"I was surprised and the US folks were surprised," the person said.
Details of deal were released just weeks after Packer was named the nation's 15th richest person in The Australian's The List, with a net worth of $4.23 billion.
Crown, with its stable of hotels in Melbourne, Perth, London and a luxury resort development in Sydney's Barangaroo due to be completed in 2021, would be a significant addition to the Wynn empire.
Crown 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.
After the announcement of the proposed merger, the gambling firm's share value soared.
The shares surged by as much as 22 per cent to $14.33 and were still more than 20 per cent higher at 11.15am Sydney time.
James Packer has a 46.1 per cent stake in Crown resorts. Photo/Getty Images.
Packer quit the Crown board in March 2018 after a nightmare period for the third generation tycoon, which included a highly publicised split with Mariah Carey and legal dramas from his involvement in business deals in Macau.
The split came within days of the arrest of 19 of Packer's Crown Resorts employees in Shanghai for allegedly chasing high roller gamblers.
Crown sold its interests in joint-venture casinos in Macau soon after. The Chinese Government, which deems gambling illegal, released the staffers and fined Crown $1.67m.
In February, the company reported a 26.7 per cent drop in first-half profit to $174.9 million.
