Hard Rock, Genting Pursuing Crown Resorts Takeover Following Wynn Fallout
Posted on: April 12, 2019, 07:59h.
Last updated on: April 12, 2019, 07:59h.
Hard Rock International and Genting Group are both exploring a takeover of Crown Resorts, the Australian casino giant that is actively pursuing offers.
Following Wynn Resorts’ abrupt termination of discussions with the Aussie casino operator, analysts at Deutsche Bank say Hard Rock – which is owned by the Seminole Tribe in Florida – and Malaysia-based Genting are now considering proposals.
News broke this week that Wynn made a A$9.99 billion ($7.12 billion) pitch for Crown Resorts. After media outlet the Australian Financial Review published details on the acquisition negotiations, Crown confirmed the reports.
Crown’s disclosure ruffled feathers at Wynn, which saw it as a ploy to attract higher bids. With the Las Vegas casino operator out, others are seeing the rare opportunity to expand into a new market.
Crown was founded by Aussie billionaire James Packer in 2007. The businessman resigned last March due to mental health reasons.
Wynn Resorts has its two flagship casinos in Las Vegas, two in Macau – the world’s richest gaming hub – and one readying to open in Boston, Massachusetts. The casino company is trying to maintain pace with its rivals, which has, and continues to, expanded into new markets.
Macau licensees Las Vegas Sands is additionally in Singapore, while Melco Resorts is in the Philippines, and soon, Cyprus.
All eyes in the gaming industry are fixated on Japan and its forthcoming liberalized gaming industry. In the interim, however, Crown Resorts would be a major win for any casino operator.
Acquisition is the only way to enter a monopoly-style market,” Delta State Holdings gaming consultant David Bonnet told Bloomberg.
The public tip of the hand infuriated Wynn executives to the point of folding on the deal. “Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction,” the company said in a release.
Hard Rock and Genting are two of the companies expected to make bids for one of Japan’s three integrated casino resorts. But regardless of whether they win or not – Sands and MGM are the frontrunners for two of the permits – the casino groups will continue their global push.
Hard Rock currently has casinos in several US states, plus Punta Cana and Canada. Genting has gaming resorts in Malaysia, UK, Singapore, Philippines, and US.
Caesars Entertainment and Mohegan Gaming & Entertainment – the gaming unit of the Connecticut tribe – are each developing properties at the Incheon International Airport in South Korea.
Australia isn’t issuing new casino licenses, and the market is highly desirable for casino operators. According to the International Monetary Fund, gross domestic product (GDP) per capita Down Under in 2018 was $56,351. That ranks No. 10 in the world, and is the highest of all of the aforementioned countries except the United States and Singapore.
It’s why at least one analyst doesn’t believe Wynn Resorts is fully removed from the Crown talks. “There’s no guarantee that any potential discussion will not resurface,” research firm Bernstein said in a note.
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