Galaxy acquires Wynn stake

Galaxy has bought a stake of about 5 per cent in Wynn Resorts from the company’s founder.

Macau.- Galaxy Entertainment has acquired approximately 5 per cent in Wynn Resorts from the latter’s founder Steve Wynn, who sold third quarter of his shares this week. Galaxy said that the purchase is a unique investment opportunity.

The operator acquired a total of 5.3 million shares at US$175, which means that Wynn received US$927 million in gross proceeds. Galaxy Vice Chairman Francis Lui said that this was a unique opportunity to acquire an investment in a globally recognised entertainment corporation with exceptionally high quality assets and a significant development pipeline.

Wynn also sold 4.1 million shares for a US$180 a share in open market transactions pursuant to Rule 144 under the Securities Act of 1933 (“Rule 144”). His stock was worth 10 per cent less than it was on January 25, when alleged sexual misconduct allegations were reported.

Grant Govertsen, Union Gaming analyst, said: “We think the market was largely ignoring the significant risks to the Wynn Macau licenses should the company continue to operate as-is without a takeover or significant outside investment. That it is Galaxy that has struck first is an encouraging sign as it relates to mitigating the licensing risk overhang. For Galaxy, the acquisition of a nearly 5 percent stake in WYNN buys Galaxy time to get to the table and figure out a deal.” The analyst said that if Galaxy was interested in a full acquisition, it could likely sell off the US assets and probably Wynn’s property in Macau to focus on the Cotai Strip.