Crown share price falls 10% after Wynn cancels $7.1 billion takeover talks
Australian casino, Crown Resorts shares plummeted on Wednesday, after Wynn resorts pulls out of A$10 billion takeover
It comes after one of the world’s largest US casino operators, Wynn, offered Crown Resorts a $10 billion takeover bid.
Crown share price.
Crown shares plunged 10% after Wynn quit takeover talks on Wednesday, abandoning the $7.1 billion dollar bid after details became public.
On Wednesday’s open, Crown shares then pared some losses to trade 8.5% under Tuesday's closing price, while the broader market fell 0.1%.
Despite the share price drop, Crown is still trading almost 10% higher than its pre-offer price At A$12.86.
Crown shares initially soared 20% after news of the takeover bid was leaked on Tuesday.
Change of heart
Wynn walked away from the deal after details of the offer became public through a leak to an Australian newspaper.
‘Wynn's actions are more likely to reflect a genuine frustration with a breach of the confidential nature of the discussions than an attempt to add pressure to the negotiation,’ said Angus Gluskie, managing director of White Funds Management, which holds Crown shares.
Leaked news breaks deal
The news was first leaked by Australian newspaper, Australian Financial Review on Tuesday afternoon, as confirmed by Crown. The paper also disclosed Wyn’s price offer.
Shortly after the leak, Wynn issued two statements, first confirming the talks, and, a few hours later, stating that they had ended.
Crown said in a statement it noted Wynn's decision.
Wynn fell almost 4% in New York on Tuesday.
The deal was originally to benefit both companies. Wynn would take on competition in Macau by giving it two lavishly revamped Australian casinos.
While, the offer came as Crown revenue suffered, due to high-rolling Chinese gamblers at its Australian tables.
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