For a moment there, Crown Resorts appeared to be headed for a sale to Wynn Resorts, a large US gambling corporation. While takeovers are not normally of interest to YieldReport, such a takeover would have an effect on Crown’s subordinated notes which are currently listed on the ASX.
When reports of discussions between the two casino operators came to light, not only did the price of Crown shares jump, the price of Crown’s series 2 notes (ASX code: CWNHB) fell. While the fall was small in comparison with the price rise of the ordinary shares, it raised the question as to why buyers and sellers of the notes would act in such a way.
The short answer is a takeover, even if it were a partial takeover, would qualify as a “Change of Control” Event. Any holding of Crown’s ordinary shares by a non-Packer entity in excess of 50% is defined by the terms of the notes’ prospectus to be a change of control.