Galaxy Entertainment buys 4.9pc stake in Wynn Resorts for US$927.5 million

PUBLISHED : Friday, 23 March, 2018, 1:48pm
UPDATED : Friday, 23 March, 2018, 11:28pm

Wynn Resorts, the majority shareholder of Wynn Macau and operator of hotels and casinos in Las Vegas, has agreed to sell 5.3 million new shares to Galaxy Entertainment Group for US$927.5 million, in connection with Steve Wynn’s move to sell his entire stake after stepping down as CEO earlier this year.

Wynn Resorts said in a voluntary announcement on the Hong Kong stock exchange on Friday that the share sale to Galaxy Entertainment was priced at US$175 a share. The selling price represented a discount of 2.7 per cent from the US$180 per share price at which the former chairman sold his 4.1 million shares in the open market on Wednesday. On Thursday, Wynn Resorts closed at US$175.54, down 1.87 per cent for the session.

In February, Wynn resigned as chairman and chief executive amid accusations of sexual misconduct. He has denied the accusations. The sale to Galaxy Entertainment also came amid a separate sale of his remaining eight million shares to two “long-term institutional investors”, also at US$175 per share.

With these transactions, the former chairman has exited his entire ownership in Wynn Resorts, the company said in a press release on Thursday.

“This is a unique opportunity to acquire an investment in a globally recognised entertainment corporation with … high quality assets and a significant development pipeline,” said Francis Lui, vice-chairman of Galaxy Entertainment in a joint press statement detailing the transaction.

The 5.3 million new shares represent 4.9 per cent of Wynn Resorts’ total issued share capital upon deal’s completion.

Galaxy Entertainment said it has the largest undeveloped land bank among the six casino concessionaries in Macau, where it operates the casino Galaxy Macau, and StarWorld Macau, a hotel tower and casino development.

In recent years, Galaxy Entertainment has been eyeing opportunities outside Macau. One example is a 2017 agreement with Monte Carlo casino and hotel group Societe des Bains de Mer to jointly develop hotels and casinos in Japan.

Wynn Resorts is constructing a Wynn Boston Harbour in Massachusetts.

The disposal of Steve Wynn’s shares “positions Wynn Resorts for even greater stability, strategic focus and future growth,” the company said in the statement.

The latest share sale by the former chairman came two weeks after settlement of a long-standing litigation with a Japanese group. Wynn Resorts is reportedly paying US$2.4 billion to settle a lawsuit involving Universal Entertainment, a Japanese gaming company, over the forced redemption of the latter’s 20 per cent stake in Wynn Resorts in 2012.

Galaxy Entertainment shares closed at HK$69.70 on Friday, down 1.6 per cent for the session. Wynn Macau’s shares fell 2.6 per cent to HK$27.70.