Casino operator Wynn Resorts, Limited WYNN withdrew its A$10 billion ($7.1 billion) offer to buy Australia's Crown Resorts CWLDF after merger discussions were leaked in media outlets, CNBC reported.
What Happened
Wynn Resorts was looking to buy Crown, which would give it ownership of two existing casinos in Australia with a third that has yet to open on the Sydney harbor front. Crown confirmed in a press release it was negotiating a deal with Wynn to sell itself for 50 percent cash and 50 percent Wynn shares.
Wynn confirmed in its own regulatory filing it was in talks with Crown and no agreement has yet to be made. However, the company said in a statement obtained by CNBC it has called off merger discussions. The company cited "the premature disclosure of preliminary discussions."
Wynn was likely targeting the Australian market ahead of its Macau gaming license coming up for renewal in 2022. Analysts previously debated the renewal process amid sexual misconduct allegations involving the namesake founder and former CEO Steve Wynn.
What's Next
Notable short seller Jim Chanos said in late 2018 he was short casino stocks with exposure to Macau, including Wynn Resorts. He said political factors such as the U.S.-China trade war gives Chinese government regulators oversized influence against American casino operators ahead of license renewals in the coming years.
The Chinese government can even "put these guys out of business if they want to with no recourse," Chanos said.
Wynn's stock traded lower by 3.6 percent to $139.63 per share at time of publication. Crown's OTC shares were trading higher by 4.5 percent.
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