Wynn Resorts CEO says firm open to M&A, Asia in sight
The chief executive of United States-based casino operator Wynn Resorts Ltd, Matt Maddox, says the company will “always be looking for opportunities” regarding mergers and acquisitions (M&A), in particular in the Asian gaming market.
Mr Maddox (pictured) addressed the group’s expansion strategy on Thursday during the firm’s first-quarter earnings call. “When it comes to M&A, we will always be looking for opportunities for assets that are tier-1, first class assets with licences that are protected in cities that are global destinations,” said Wynn Resorts’ CEO.
He added: “While we are not pursuing any acquisitions at this stage, we … [will] be looking at opportunities that you cannot replicate through development.”
In April, Wynn Resorts – the parent company of Macau-based casino firm Wynn Macau Ltd – said it had ended talks on a potential deal to acquire Australia-based gaming operator Crown Resorts Ltd. That followed what the company termed “premature disclosure of preliminary discussions” regarding a potential deal.
Crown Resorts had confirmed earlier that it had been approached by Wynn Resorts regarding a potential AUD10-billion (US$7.1-billion) takeover.
On Thursday’s conference call, Mr Maddox did not mention the aborted discussions with the Australian firm. But he stated that the company would “be looking at quality assets around the world”.
“We believe that Asia will continue to grow faster than the West and if there are opportunities in those areas … we will take a look at it, but we do not have anything right now that we are focused on,” he explained.
Mr Maddox said that any M&A opportunity would have to fit with Wynn Resorts’ profile and “be accretive and be able to capture long-term growth” for the company and its shareholders.
“We are high-end operators, we are quality operators and we will be looking at quality assets around the world,” said the executive. “We are not regional gaming operators, so that’s not an area where we are going to be branching out in a significant way, given there will likely be lots of regional gaming properties for sale,” he added.
The CEO said additionally that Wynn Resorts’ growth pipeline “is quite robust” and that the phase of large-scale investments was now “behind us” after a multi-year capital development programme was nearing its end, as the company prepares to open the US$2.6-billion Encore Boston Harbor project.
The casino firm had most recently been focussed on resolving regulatory reviews in two U.S. jurisdictions, Nevada and Massachussetts, where its operating licences were under review. Gaming regulators in each jurisdiction found Wynn Resorts suitable to hold a licence, but they each imposed a hefty fine on the company related to the way the firm handled allegations of sexual misconduct involving alleged acts by the firm’s founder and former chairman and chief executive Steve Wynn against female staff members in the group.
On Thursday after New York market hours, Wynn Resorts told the Nasdaq that it had swung back to profit in the first quarter of this year. Its net profit to shareholders was US$104.9 million, compared to a loss of US$204.3 million in the first quarter last year.
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