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Wynn has its eyes set on big acquisitions

Mon, May 13, 12:18pm by Staff Writer

Las Vegas based gambling giant Wynn Resorts has flagged renewed interest in top notch acquisitions after it aborted a potential takeover of James Packer’s Crown Resorts last month.

The Australian Financial Review is reporting that Wynn has no specific targets for its acquisitions, but it hasn’t ruled out another tilt at Crown.

Chief executive Matthew Maddox said the company “will always be looking for opportunities for assets that are tier-one, first-class assets with licences that are protected in cities that are global destinations.”

“So while we are not pursuing any acquisitions at this stage, we will, along with all of our competitions I’m sure, be looking at opportunities that you can’t replicate through development,” he told the AFR last Thursday.

Wynn pulled out of discussions to buy Crown in a potential $10 billion deal last month.

Since then, the company has channelled its focus on resolving major regulatory breaches relating to its founder Steve Wynn in Nevada and Massachusetts.

Regulations in Massachusetts last week gave Wynn the all clear to open its brand new Encore Boston Harbour project, but fined the company US35 million in relation to the handling of sexual assault allegations against Mr Wynn.

Wilson Asset management portfolio manager John Ayoub said Mr Maddox’s description of the properties Wynn would be attracted to buy applied to Crown’s Melbourne casino and its casino development in Sydney.

However, he said the comments didn’t confirm a pursuit of Crown was back on.

“It is a strategic fit,” Mr Ayoub said of a potential takeover by Wynn.

“Undoubtedly they’d still have an interest in Crown … but they’re probably going to take a more patient and prudent approach rather than trying to outbid themselves.”

Mr Maddox spoke after releasing first quarter results that were impacted by “choppy”, high roller activity in its biggest market of China, painted a picture of a company at the end of a series of investments and now looking for the next move.

“Our growth pipeline is quite robust and the large capital spend is now behind us after a multi-year capital development program and we’re about to open up our Boston Harbour and really start generating lots of free cash flow,” Mr Maddox said.

Describing Wynn as a “development company at heart” that was focused on “new projects”, Mr Maddox said: “We will continually look for enhanced shareholder value without increasing our leverage profile and without hurting our free cash flow stor.”

Pressed on the company’s strategic approach to potential merger deals, Mr Maddox said it would not go into lower market or value businesses or regional operations.

“We are high-end operators, we are quality operators and we will be looking at quality assets around the world,” he said.

Analysts forecast first quarter earnings of US$1.60 per share, down from US$2.30 for the same quarter later year, according to a Reuters survey.

Wynn’s Encore Casino all systems go

Wynn Resorts’ newly developed Encore Casino in Boston Harbour is set to receive guests from June 23, Casino Buzz reports.

It was just last week when the gambling and casino operator was slapped with a fine by the Massachusetts Gaming Commission following an investigation into the sexual misconduct allegations on the former Wynn Resorts CEO, Steve Wynn.

The Age reported that the Massachusetts Gaming Commission fined the company US$35 million and current CEO Matthew Maddox US$500,000 for his ‘clear failure’ to require an investigation of at least one misconduct complaint he’d been aware of.

It also required the Nevada company, which also owns properties in Las Vegas and Macau, to be subject to review by an independent firm selected by the state as a condition of maintaining its licence.

Wynn Resorts and lawyers for Steve Wynn didn’t respond to emails seeking comment on the late evening decision, which effectively clears the way for the opening of the company’s US$2.6 billion Encore Boston Harbour resort in June.

The long-awaited decision comes after the commission released a report last month of more than 200 pages, held tree days of public hearings and deliberated for nearly four weeks on what company officials knew and did about the allegations.

Steve Wynn has denied the claims, saying his relationships with female employees, many of them spa workers and cocktail waitresses, had been consensual.

Maddox along with others in the management was found to be complicit in concealing facts and downplaying the allegations of sexual misconduct against the former CEO.

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