Matt Maddox, the new CEO of Wynn Resorts, says his company might sell the $2.4 billion Wynn Boston Harbor in the coming months. The executive said Wynn Resorts remains committed to building the casino-resort in the Boston-area city of Everett.e
In a statement to Bloomberg News, Matt Maddox said he wants to “maximize the value of our assets and mitigate risk.”
Those were the first comments by Maddox since last week, when Bloomberg and Forbes reported Wynn Resorts might be the target of a buyout by another casino company. A person with knowledge of the matter told Bloomberg that MGM Resorts International is one of those which has spoken to Wynn.
A sale makes a lot of sense for Wynn’s board of directors. Wynn Resorts faces fallout from its founder and former CEO’s various scandals. The 76-year old Steve Wynn, who founded the company in 2002, stepped down after a deluge of allegations which included sexual misconduct.
Steve Wynn Resigns from Wynn Resorts
Eventually, Steve Wynn cashed out 12.1 million shares of Wynn Resorts and left the company holding $3 billion. Wynn’s board still has to answer questions of whether they looked the other way while the face of the company engaged in sexual misconduct for decades.
Those questions will be hard for many board members to answer. The first allegation came in 1973, while the Las Vegas Review-Journal (under previous ownership) buried a 1998 expose of Steve Wynn’s wrongdoing. In 2005, Steve Wynn settled a $7.5 million lawsuit which involved a child born out of wedlock.
Elaine Wynn’s Allegations
Meanwhile, Steve Wynn’s estranged former wife, Elaine Wynn, made allegations in the wake of their 2011 divorce. When she sued Steve Wynn and Wynn Resorts in 2015, she made allegations that the board of directors covered up Steve Wynn’s wrongdoing.
Wynn Resorts faces investigations by the Nevada Gaming Commission, the Massachusetts Gaming Commission, and the Macau Bureau of Investigations. Now that Steve Wynn has resigned, the board members have to answer questions. A dark cloud hangs over Wynn Resorts even now; a buyout might be the best way to remove that cloud.
Buyout Best Deal for Wynn’s Board?
The board members could take a buyout and walk away with ample compensation, while one of the company’s rivals would buy some of the most lucrative assets in the casino industry. Wynn Resorts still has huge value, which is estimated to be worth $18 billion to $20 billion.
Since the start of the year, when the Wall Street Journal first published allegations against its founder, Wynn Resorts shares have risen 6%. Given the inevitable hit the stock prices took due to the dozens of accusations made against Wynn, which continued week after week, has to have driven the price down.
Wynn Resorts Portfolio
Wynn Resorts owns casinos on the Las Vegas Strip, Boston, and Macau. The Wynn Las Vegas is the flagship casino owned by Wynn, but its two casinos in Macau — Wynn Macau and Wynn Palace — are the most lucrative properties. The Encore brand of resorts often sit next to the Wynn casinos, as a phase two luxury expansion.
MGM Resorts International has bought Steve Wynn properties before. When his art collection habits caused Steve Wynn financial issues in 2000, he sold Bellagio and other properties to MGM Resorts.
Two-Stage Buyout of Wynn
A buyout to MGM Resorts would require preparation. Under Massachusetts gaming law, no single casino company can hold two casino licenses. MGM Resorts is preparing for the grand opening of MGM Springfield in Western Massachusetts later this year, so it could not own the Wynn Boston Harbor at the same time.
Thus, a two-stage sale of Wynn assets might be in the offing. If so — and if MGM Resorts is to be the buyer — then Wynn Resorts has to sell the Boston property. Whoever buys the Wynn Boston Harbor would own the first legal land-based casino in the Boston metropolitan area’s history.