Wynn Resorts scotches potential takeover of Crown Resorts

(Crown's share price had been heading south in recent months, as a fall in big spenders following a crackdown by Beijing hurt revenue (AFP Photo/WILLIAM WEST)

Wynn Resorts said Tuesday it was pulling the plug on a potential takeover of Australian gambling giant Crown Resorts that had been seen as fetching about $7.1 billion.

Both companies had previously confirmed the talks.

"Following the premature disclosure of preliminary discussions, Wynn Resorts has terminated all discussions with Crown Resorts concerning any transaction," Las Vegas-based Wynn said Tuesday.

Shares of Wynn were down 3.2 percent at $140.23 at mid-morning in New York.

Crown on Tuesday had described Wynn's proposal as consisting of 50 percent cash and 50 percent Wynn shares, describing the talks on a "potential change of control transaction" as being at a "preliminary stage." The news had lifted shares of Sydney-listed Crown by nearly 20 percent on Tuesday.

Crown has undergone significant restructuring in recent years and divested itself of several overseas interests.

A crackdown by Beijing has driven away many big-spenders and hurt revenues. Around the same time, several of its employees were detained in China before being released in 2017.

Last year, Australian tycoon and former Crown head James Packer, son of the late publishing and gaming mogul Kerry Packer, abruptly departed the family firm, citing "mental health issues," though he remains a significant shareholder.

Wynn Resorts, which employs 23,000 people around the world, operates casinos in Las Vegas and Macau.

Founder Steve Wynn sold his entire stake in the Las Vegas-based firm after he stepped down earlier this year as chairman and chief executive in the wake of allegations of decades of sexual misconduct.