Comment: How a leak at an awkward moment killed Packer's $10b deal
The $10 billion proposed bid for Crown Resorts by US gaming giant Wynn Resorts survived only about 24 hours before
Instead, the leak – which interacted with the ASX’s continuous disclosure regime to force Crown to disclose the fact of the proposal and the outline of its terms - meant it had an incomplete deal, with no certainty as to final price or terms or, indeed, success.There was nothing concrete Wynn could tell the market, or its regulators, about a proposal to spend $10 billion on a company they would know little, if anything, about and in a jurisdiction they would be unfamiliar with.
While it is considered unlikely Wynn would lose its licence and be forced to sell the Boston complex – another fine is probably more likely – Wynn would be sensitive to the need not to needlessly stir up its regulators by blind-siding them with a $10 billion deal. It would also have been aware, once the existence of the negotiations had been flushed out, that the pressure to get a deal done quickly would hand the Crown board greater leverage to extract another price increase and/or the tweaking of the proportions of cash and scrip in the offer and would alert any potential counter-bidders, which could pitch it into a bidding war.In the circumstances, it probably thought it had no option but to walk away.
If the concept of acquiring Crown made sense on Monday it remains sensible and attractive today, tomorrow and the days, weeks and months after.
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