Las Vegas casino group makes $10b takeover play for Crown Resorts

The company formed by the man known as the “unofficial King of Las Vegas” has made a bold $10 billion takeover bid for Crown Resorts, which could see James Packer cash out of his gaming empire.

Wynn Resorts has offered by buy Crown in a cash-and-scrip deal. Picture: Getty

James Packer is eyeing a $4.67 billion payday as Crown Resorts fields a takeover offer from a major Las Vegas casino operator.

Shares in the Packer-backed Crown surged by close to 20 per cent on Tuesday after the Melbourne-based gambling giant announced it had received a $10 billion takeover offer from Wynn Resorts.

The lift added $730 million to the value of Mr Packer’s 46.8 per cent stake in Crown, which operates casinos and hotels in Melbourne, Perth and London and is building a new luxury property in Sydney.

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The construction site of Crown Resorts’ Barangaroo casino project. Picture: Hollie Adams

Wynn, co-founded by US ­casino developer Steve Wynn, has offered by buy Crown outright in a deal which values the company at $14.75 a share.

The offer is evenly split ­between cash and shares in Wynn, which owns casinos in Las Vegas and the Chinese gambling mecca Macau.

It values Mr Packer’s stake at $4.67 billion.

The gaming mogul would collect $2.33 billion in cash and take the remainder as shares in Wynn if the deal goes ahead.

He would emerge with a stake of about 10 per cent in the enlarged Wynn group.

The offer represents a 25.6 per cent premium to the $11.74 Crown closed at on Monday before it announced the offer.

It is being structured as a scheme of arrangement, meaning it needs 75 per cent approval from the shareholders who vote on it if the Crown board decides to accept it.

Crown yesterday said it was holding discussions with Wynn but stressed they were at an early stage. “Crown confirms that it is in confidential discussions with Wynn regarding a potential change of control transaction following approaches to Crown by Wynn,” it said in a statement lodged with the stockmarket.

James Packer resigned as a director of Crown last year. Picture: Getty Images

“The discussions between Crown and Wynn are at a ­preliminary stage and no agreement has been reached between the parties in relation to the structure, value or terms of a transaction.

“There is no certainty that these discussions will result in a transaction.”

Mr Packer resigned as a ­director of Crown, citing mental health reasons, in March last year.

Wynn owns Wynn Las Vegas and Encore, both located in Las Vegas, and Wynn Macau, Wynn Palace and ­Encore at Wynn Macau in the Chinese gambling mecca.

Mr Wynn has been dubbed the “unofficial King of Las Vegas” after developing legendary properties including the Bellagio, Treasure Island and The Mirage.

The company that bears his name sold those properties to MGM Grand in 2000. Mr Wynn was forced to stand down as chief executive early last year and later sold his shares in Wynn after claims he sexually harassed women who worked for him.

Citi gaming analyst Anil Daswani said Crown shareholders would own about 19 per cent of Wynn if the deal went ahead on current terms.

“Wynn Resorts could bring their solid VIP execution capabilities to the Melbourne market and may aid Crown in ramping their new property in Barangaroo in Sydney,” Mr Daswani said. Morgan Stanley analyst Thomas Allen said the move was new for Wynn, given it had built, not bought, all its properties to date.

“We think a potential deal could make strategic sense,” Mr Allen said.

“Wynn’s focus has been on owning a handful of luxury assets in the best gaming markets in the world and we believe Crown’s portfolio would fit into this strategy.”

Shares in Crown gained 19.7 per cent yesterday to close at $14.05.

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