The Crown Resorts Limited (ASX: CWN) share price is up 19% to $14 today after it revealed that Las Vegas-based casino and construction group Wynn Resorts is in discussions with it about a takeover bid valuing it at $14.75 per share.
According to the announcement Wynn would offer 50% cash and 50% Wynn shares to Crown shareholders using a volume weighted average price of Wynn shares immediately prior to the announcement of an agreed transaction.
Wynn Resorts is listed on the tech-heavy NASDAQ index with its scrip closing up 3% to US$144.45 this morning on a market value of US$15.6 billion.
Crown is valued around A$8 billion, so this would be a significant acquisition to swallow for Wynn and require the backing of its own shareholders.
Moreover, almost half of Crown is still owned by the unpredictable James Packer so any deal would require his approval and the stock is trading 12% below the offer price due to uncertainty as to whether Packer is likely to agree to a deal.
Crown is currently in the middle of a flagship construction project in Sydney to build a luxury hotel, apartment, and casino complex at Sydney's Barangaroo and its balance sheet is stretched as a result. Therefore the takeover might be tempting even if it sees Packer lose official control of the family business.
The new Barangaroo Sydney casino will become the only competitor to the Star Casino across the harbour that is operated by Star Entertainment Group Ltd (ASX: SGR). Its share price also caught a 6% updraft today on the back of the Crown news.
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