Wynn bids for Crown Resorts; MGM garners lofty accolades

In the latest episode from this winter’s senseless round of buy-or-be-bought transactions, Wynn Resorts has tendered an offer to Crown Resorts. Presumably the fun has gone out of tying James Packer‘s shoelaces together. The transaction, while would transform Wynn into a Australia-centric company, is valued at $7 billion. “If Wynn Resorts acquired Crown, not only would the larger enterprise become a more difficult target but it would deter potential suitors,” said Union Gaming analyst John DeCree. Analysts at Sanford C. Bernstein minced fewer words: “While we are somewhat perplexed as to why Wynn Resorts would be interested in acquiring Crown as an acquisition deviates from historical organic growth strategy, we see there may be merit in an acquisition.”

JP Morgan analyst Joseph Greff was likewise surprised, writing that “we have always considered WYNN a developer rather than a consolidator/buyer of gaming assets …  Is this defensive (a question we have been getting a lot this morning from investors)? Perhaps, but a $7b+ transaction to get defensive doesn’t strike us as something that management would want to engage in.”

Crown’s high exposure to Australia might keep Las Vegas Sands and MGM Resorts International at bay, since they “probably have little to no strategic interest in Australia, making Wynn Resorts a less attractive target,” wrote DeCree. The acquisition would complicate matters in Macao, since Galaxy Entertainment owns 5% of Wynn and Macanese law prevents one concessionaire from owning 5% or more of another.

Suggesting that Wynn use the acquisition to quiet its critics at home, Bernstein analysts wrote, it “could also signal to Japan that Wynn Resorts is a larger, more serious candidate and Massachusetts may think twice about implementing harsh conditions on the licence.” Or, as GGR Daily noted dryly, Wynn Resorts has denied that Steve Wynn‘s sexual practices are “likely to harm it as the group pitches for a Japan casino license, although some commentators have said it is hardly a positive selling point for the brand in that context.” Tell us about it. If Wynn feels it has been stuck in “probity hell,” be it noted that suitability findings can take as long as three years to be reached in the Land of Oz.

* Kudos to MGM China for phasing out single-use plastic utensils at its Macao casinos. The company said the transition “will save 4.5 million pieces of single-use plastic per year from being disposed of into the environment.” Yes, even your doggie back will be biodegradable. “We have acknowledged that this is only the beginning of the journey, and we know there is more that can be done. We will continue our efforts in working with the government and industry partners to introduce many more positive steps toward sustainability,” said CEO Grant Bowie. While casino companies are slow to take similar steps in the Las Vegas market, Sands China has been eliminating single-use straws, and Melco Resorts & Entertainment says it is “eliminating unnecessary plastic packaging and reducing single-use plastics.” Good on you, gentlemen.

On the domestic front, MGM has received a perfect 100 score from the Human Rights Campaign‘s Corporate Equality Index. This means if you’re gay, lesbian, bisexual or transgender, MGM is the best place to work, period. One of the areas in which MGM has been hailed is for its courtroom advocacy on behalf of the LGBT community. At a time when LGBT rights under attack in this country, MGM is setting the example the rest of our society out to follow.

* Having covered the sale of two Dan Gilbert gaming properties yesterday we see no need to recap our coverage today. However, if you missed the story, this feature is about as definitive as I think you’re going to get.

* Finally, it took six months to get there but Hard Rock Atlantic City has reached a labor accord with Unite-Here, covering 1,780 casino employees. A ratification vote will be held Thursday but union President Robert McDevitt is predicting victory. “This local’s success no doubt raises the standards for all of New Jersey’s workers and strengthens our labor movement as a whole,” said New Jersey AFL-CIO President Charles Wowkanech, perhaps alluding to the collapse of Trump Taj Mahal under then-owner Carl Icahn‘s intransigent attitude toward collective bargaining.