James Packer, Australian billionaire and owner of Crown Resorts is all set to let go of his venture, after a deal that includes Las Vegas-based Wynn Resorts buying it for AUD 10 billion ($7.1 billion). Both the entities are in talks with each other, and the transaction seems imminent.
The deal just needs Crown shareholders’ approval to come into effect and if it does, it will mean the end of the Packer family dynasty, which played a central role in Australian business for almost a century. Crown Resorts announced the offer on Tuesday and sent shares soaring upwards by one fifth.
The offer comes as both casino operators face leadership challenges. Packer was Crown’s former exec. Chairman but stepped down from the company’s board last year in relation to some mental health issues, whereas Steve Wynn, former chairman of Wynn Resorts stepped down after a sexual misconduct investigation turned out to be true.
Some analysts have said that the deal, which represented a premium of 26% over the stock’s closing price on Monday, was hard to justify given the problems Wynn Resorts has recently faced with US authorities.
A report by Massachusetts regulators recently stated that casino executives at Wynn tried to hide their boss’ sexual misconduct allegations to look good. The company was in talks to begin operations in the state, but this report may have consequences on this development. Wynn recently even reached a settlement with Nevada Gaming Control Board (NGCB) to operate in the state. Therefore, Wynn’s gaming license in Nevada is no longer in jeopardy.
Coming to Crown, it is an AUD 2.2 billion casino on Sydney’s waterfront that is targeted towards high rollers, primarily from China. The business initially flourished and expanded to the US, Macau and elsewhere, but after 19 employees were arrested in China in 2016, Packer returned to Australia and sold most of the group’s overseas assets.
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