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Wynn makes $7 billion buyout play for Australia's Crown Resorts

Credit: Reuters Studio
Published on April 9, 2019 - Duration: 01:59s

Wynn makes $7 billion buyout play for Australia's Crown Resorts

Australian casino giant Crown Resorts says its received an indicative $7.1 billion takeover offer from Las Vegas's Wynn Resorts, sending Crown's shares soaring as investors bet on an even higher bid.

Ed Giles reports.

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Wynn makes $7 billion buyout play for Australia's Crown Resorts

Las Vegas casino empire Wynn is making a play for one of its big rivals in Asia: Australia's Crown Resorts.

Wynn's putting 7 billion dollars on the table for the deal according to a Crown statement Tuesday (April 9).

The news sent Crown's share price soaring by over 20 percent.

A sale would give Wynn, the world's second-largest casino company, a foothold in a gambling market popular with Chinese tourists.

But it also comes as a slowdown in China threatens profits both for Wynn and Crown.

Reuters Byron Kaye explains from Sydney.

(SOUNDBITE) (English) REUTERS AUSTRALIA CHIEF COMPANIES CORRESPONDENT, BYRON KAYE, SAYING: "At the moment the downturn in Chinese consumer spending is affecting gambling companies all over Asia, including Macau and including Australia.

Wynn already has business in Macau and it's hoping to grow in Japan as well, and all of these markets including Australia have this dependence on wealthy Chinese gamblers or VIPs, or whales if you will.

Those guys are not really racing into Australia just at the moment, so Wynn could get Crown's existing assets in Australia but it's going to still have that exposure to the downturn in VIPs." If the deal goes through it would also mark the end to Australian gambling tycoon James Packer's 47 percent ownership of Crown.

Packer quit the company's board last year, having founded Crown by splitting the media and casino assets that underpinned his father's business empire.

(SOUNDBITE) (English) REUTERS AUSTRALIA CHIEF COMPANIES CORRESPONDENT, SAYING: "For Packer personally it's much more symbolic, because crown resorts is his idea.

He created the company out of his father's media empire about 12 years ago, and this represents the end of that dream - but at a huge cash benefit to him." Crown said the talks with Wynn were at a preliminary stage with no agreement on value or structure yet.

A Wynn spokesman declined to comment.

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