Steve Wynn sells stake in the company he founded

Hong Kong

STEVE Wynn, the former chief executive of Wynn Resorts Ltd, has disposed of his entire 11.8 per cent stake in the firm for US$2.1 billion in a dramatic exit of the casino and hotel enterprise he founded over 16 years ago. In an unexpected separate move, Macau casino operator Galaxy Entertainment said it has agreed to buy 5.3 million primary shares of Wynn Resorts at US$175 per share, giving it around a 5 per cent stake in the operator which has resorts in Las Vegas and Macau. Galaxy is one of six licensed operators in the world's largest gambling hub of Macau and competes with Wynn along with Sands China, MGM China and Melco Resorts .

The casino mogul's share sale comes a week after Wynn Resorts said Steve and Elaine Wynn, who has a 9.26 per cent stake, had scrapped a shareholder agreement that prevented them from selling their stakes.

Steve Wynn resigned as CEO of the Las Vegas-based company last month, following claims that he subjected women who worked for him to unwanted advances. He has denied the accusations.

In a joint statement by Galaxy and Wynn on Wednesday, Galaxy vice-chairman Francis Lui said it was a unique opportunity to "acquire an investment in a globally recognised entertainment corporation with exceptionally high quality assets and a significant development pipeline". Wynn Resorts CEO Matt Maddox said Galaxy shared many of the same core "operating philosophies and values".

Wynn said two long-term institutional investors, currently holding stakes in Wynn Resorts, have agreed to purchase the remaining eight million shares held by Steve Wynn also at US$175 a share.

A Thursday filing showed the embattled founder sold 4.1 million shares of Wynn Resorts at US$180 per share - effectively exiting his entire 12.1 million shares, or 11.8 per cent stake in the firm, for a total of US$2.14 billion.

Mr Wynn, who started in Las Vegas casinos in the 1960s, created some of Las Vegas' most iconic landmarks - the Mirage, Bellagio and Treasure Island. He was forced to sell his multi-billion dollar operation Mirage Resorts to tycoon Kirk Kerkorian in a hostile takeover in 2000.

The 76-year-old tycoon, whose signature denotes the company's logo, had built two lavish resorts in Macau where only six firms have licences to operate casinos.

Vitaly Umansky, analyst at Sanford C Bernstein in Hong Kong, said the implications of Galaxy's investment goes beyond what looks like a passive move at this stage. "Wynn and Galaxy may be looking at collaborating on future development opportunities in Asia, with Japan being the critical development initiative." Galaxy's octogenarian founder Lui Che Woo, one of Asia's wealthiest billionaires, has a net wealth of US$22 billion according to Forbes. Mr Lui who started his career in construction has grown his casino company into one of Macau's biggest operators over the past decade. While Galaxy has been primarily focused on Macau with its three casinos, it this week received a licence to operate a roughly US$500 million resort in Boracay, the Philippines' most famous holiday island.

Wynn, which operates a resort on Cotai and Macau's main peninsula, focuses on premium and VIP customers, while Galaxy targets both the high end segment and the broader mass. Both companies have reported strong earnings growth in the fourth quarter with Galaxy posting a 67 per cent surge in 2017 profit. REUTERS