SiGMA

Wynn Resorts gains on bid speculation after billionaire builds stake

Posted: Nov 02, 2022 11:58 Category: Americas , Land-Based , M&A Action , Posted by Sharon Singleton

Stock in Wynn Resorts has risen this week as speculation mounts that billionaire Tilman J. Fertitta may be planning to bid for the operator.

The gains come after Fertitta disclosed in a 13G filing to the Securities and Exchange Commission on Monday that he has built a 6.1 percent stake in the company. That makes him the second-largest investor after Elaine Wynn. 

On Tuesday, the shares rose more than 6 percent to $67.86, adding to gains on Monday. On Friday it closed at $58.30.

The filing indicates a passive investment, yet CBRE Equity Research analyst John DeCree suggests he may be planning to be more actively involved, according to media reports. 

Fertitta owns the Golden Nugget casinos, the Landry’s Seafood chain and the NBA’s Houston Rockets. 

Wynn’s Macau woes

The analyst said that the fact that Wynn’s shares are at a low valuation make it a tempting target. Although the casino market in the U.S. has bounced back from Covid, Wynn’s properties in Macau are suffering as the Asian gambling hub continues to operate under strict travel restrictions. 

Before this week’s gains, Wynn’s stock was down 45 percent this year, according to Bloomberg figures. 

Pre-market Wednesday, Wynn shares had lost some momentum, declining 1.2 percent.

For 2Q22, Wynn reported a drop of $83.1 million in operating revenue to $908.8 million, as the sluggish conditions in Macau continued to weigh on its results. 

Despite the continuing lacklustre performance, the company said it was confident Macau would recover over time.  

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