Terry McCrann: Crown is now officially on the market

Although Wynn Resorts has pulled out of its talks with Crown Resorts, the Melbourne-based casino operator is very much on the market, says Terry McCrann.

Easy come, easy go. On Tuesday James Packer picked up $780 million or so — give or take the odd million; on Wednesday $430 million or so of that evaporated. Pfft.

Don’t feel too bad on his behalf. His controlling stake in Crown was still worth around $4.3 billion as of yesterday evening and that was $350 million or so more than the value at which it had started the week.

WYNN RESORTS SCOTCHES TAKEOVER OF CROWN

WYNN MAKES $7 BILLION BUYOUT PLAY

On Tuesday morning the news officially broke that Crown and the Las Vegas-based Wynn Resorts were negotiating a $25 billion merger.

In the afternoon we got a terse, a very terse, confirmation from Wynn. Then, just before midnight the deal was off.

That’s not the way we do things in Vegas was the implicit rebuke from Wynn: we don’t like negotiating with the lights on.

Well, two big things have changed since Monday and nothing can unchange them.

In the all-important words that all bidders wait for at every auction: “the property is now on the market”.

James Packer stands to make billions of dollars if Crown Resorts is sold. Picture: AAP

The events of the week have revealed two things. Packer is prepared to sell his 46 per cent stake in Crown. You get that and you get Crown.

And he’s prepared to sell at around $10 billion for the whole company — $5 billion or so for him.

That’s a powerful and very public signal to a host of potential buyers — a couple of them in Vegas in addition to Wynn; a couple of them in Asia led by the Malaysian group Genting.

Many would have forgotten that it was only half a dozen or so years ago that Genting came south looking to buy control of our other big casino gaming group, Star — then called Echo. Indeed, back then it looked like they would end up going head to head with — a much younger, much more aggressively ambitious — Packer, who was trying to persuade Echo/Star to merge or deal him in on its Sydney franchise.

That was when Packer was embarked on “owning the world” — Australia, Macau, Singapore, the Philippines, Japan — if it finally opened up, and back even to casino ground zero, Vegas.

Echo/Star said no to Packer and his response was to embark on Barangaroo.

As for Genting it finally sold out of Echo/Star in 2017.

Wynn Resorts founder Steve Wynn.

His Barangaroo move, incidentally, was reminiscent of what his — Packer’s — great corporate hero, Rupert Murdoch, did in Britain at the end of the 1980s.

Refused the licence to develop satellite pay-TV, Murdoch launched his own competing service, Sky.

After a lot of history, Sky was last year sold to the US Comcast group for $55 billion.

Now, there are two big things about Wynn’s decision to walk.

First, and very critically, it’s been talking to Crown since last year and indeed had already previously made some sort of offer.

It’s not as if this latest go was just a fleeting thought. The — and this is the second thing, importantly, post-Wynn — Wynn had clearly made a corporate decision that merging with Crown would be a good idea.

It hasn’t ceased to be a good idea just because the company got miffed at the leak.

Indeed, it might become an even better idea if it started to look like somebody else was going to get Crown and pose an unpleasant competitive threat to Wynn.

This second point is that this is a more conventionally corporate Wynn following the departure of the company’s founder, controller and driving force Steve Wynn for apparently being a too “hands on” CEO.

Construction on the Crown Casino building at Sydney's Barangaroo precinct. Picture: AAP

There are two sides to this change. The desire to buy Crown was not just some entrepreneurial whim.

But equally, if it were being done Steve-to-James, rather than Wynn-to-Crown, it could be done over a handshake, not via teams of lawyers and accountants.

Now Wynn, the man, is literally “not there” and Packer is effectively an absentee landlord, albeit on the end of a phone and the person who will still say the only yes or no that matters.

There are two key points to be said about Packer. He could be a seller on Monday and a continuing owner on Wednesday. He’s always been mercurial; he still is.

But the one thing he is not going to be again is a builder. He is not going to come back to restart his ambition of building a global gaming company. That’s over, that’s yesterday.

Put the two together and it is impossible to see him being a long-term $4.3 billion passive investor in a steady-state, Australian-only gaming utility.

Apart from anything else, that would run the risk it could turn it into a $3 billion passive investment. And then ...

RBA STAYS IN CONTROL

Easy does it — was the message from the number two guy at the Reserve Bank, Guy Debelle.

In the broad, what he was saying in a speech yesterday was that we really did not know how both the local and global (and especially Chinese) economies were playing out.

More subtly and in some way more importantly, he also “said” we do not know that, more specifically, the global and local economies were sliding inexorably into recession.

There’s a near-universal belief — and it really is pretty much just that, a (near hysterical) belief — among the economentariat that the local economy is sliding into recession or near-recession and that the RBA will have to start slashing its official interest rate.

Thank goodness the RBA has not joined the rush to the “rate cut side of the ship” (from the other side barely a year ago). Thank goodness also, the RBA will assess everything, in real time 24/7, and ahead of every meeting.