Galaxy Entertainment Group (GEG) has emerged as a shock investor in Wynn Resorts, with the two integrated resort giants announcing today that Galaxy has agreed to purchase 5.3 million primary Wynn Resorts shares for a total of US$927.5 million.
Wynn also announced that two of its current long-term institutional investors have reached an agreement to purchase the remaining 8 million shares held by former Chairman and CEO Steve Wynn, ending his association – on paper at least – with the company he founded. The company had announced only hours earlier that Wynn had sold 4.1 million of his 12.1 million share holding for US$738 million at US$180 per share, reducing his stake from 12.1% to 7.8% as of this morning.
The joint announcements represent a huge shift in the global gaming industry and come just a day after Galaxy was granted a provisional license for another expansion opportunity, its planned US$500 million IR in Boracay in the Philippines.
“This is a unique opportunity to acquire an investment in a globally recognized entertainment corporation with exceptionally high quality assets and a significant development pipeline,” said Galaxy Entertainment Group Vice Chairman Francis Lui.
Wynn Resorts CEO Matt Maddox added that it was “an honor to have such a distinguished company as Galaxy Entertainment as a shareholder which shares many of the same core operating philosophies and values.”
The purchase price of shares for both GEG and the two institutional investors buying from Wynn has been set at US$175 per share.
These latest developments follow the settlement two weeks ago of long-standing litigation between Wynn Resorts and Japan’s Universal Entertainment Corporation, which was founded by former Wynn Resorts board member Kazuo Okada.
“Resolution of that litigation, combined with the new agreement with Galaxy Entertainment Group and the liquidation of Steve Wynn’s shares in the company, positions Wynn Resorts for even greater stability, strategic focus and future growth,” Wynn Resorts said in a statement.
The changes announced this morning represent a generational change in the global gaming industry. Steve Wynn – seen by many as the father of the integrated resort – started his career in the gaming industry in the late 1960s. With the share sales announced today, he bows out of the industry he played a major role in creating.
At the same time, Galaxy Entertainment – a company that opened its first casino just 14 years ago – places itself on the world stage as a truly international global player with a serious chance of acquiring an integrated resort in gaming’s holy grail – Japan.
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