Crown Resorts Stock Spiked 22% After Wynn's $7.1B Acquisition Plan Announced

Las Vegas gambling pillar Wynn Resorts Ltd. is in preliminary talks to acquire Australia's Crown Resorts Ltd., which operates two of Australia’s leading gambling and entertainment complexes, Crown Melbourne and Crown Perth.

Investors welcomed the possibility of a U.S. buyout. Shares in Crown spiked 22% midday at the Australian Securities Exchange (ASX) in Sydney following the announcement.

Wynn proposes a US$7.1 billion (A$10 billion) cash and stock deal that values Crown shares at US$10.51 (A$14.75) each, according to a statement to the Australian Stock Exchange on Tuesday.

Crown Resorts is controlled by Australian media billionaire, James Packer. It is majority owned by Packer’s Consolidated Press Holdings and has operations in Melbourne, Perth, and London. It also has a luxury resort development in Sydney’s Barangaroo to be completed in 2021.

Packer, who was once engaged to American pop idol Mariah Carey, stepped down as CEO in 2018 after allegations of sexual misconduct.

Wynn’s proposal, which is still being reviewed by the Crown board, has an implied value of AU$14.75 per share, or a 25.6% premium to the stock’s AU$11.74 price before trade was stopped ahead of the announcement.

"The discussions between Crown and Wynn are at a preliminary stage," said Crown. "There is no certainty that these discussions will result in a transaction."

Wynn Resorts declined to comment on its takeover move. It owns casinos in Las Vegas, Macau and Boston. Founder Steve Wynn is a Las Vegas legend, and is credited with helping transform Las Vegas gambling dens into entertainment palaces offering spectacular shows and high-end restaurants.

The proposal is 50-50 in cash and Wynn shares and is subject to regulatory approval in Australia and the United States.