Wynn Resorts wants to buy out Macau partner

September 2

It was announced today that Wynn Resorts Ltd. is going to issue approximately 1.3 million shares to buy out the company's minority partners in a Macau casino development subsidiary.

In a filing with the Securities and Exchange Commission Wednesday, Wynn Resorts stated that it would buy out minority partners who hold the remaining 17.5 percent interest in Wynn Macau. Instead of a direct stake in the Macau resort, the minority partners would own a piece of the parent company.

Wynn Resorts, controlled by casino developer Steve Wynn, will then be able to get 100 percent of the profit made from the Macau subsidiary, which is developing a $700 million resort in the Chinese province.

Analysts say that the transaction is a windfall for Wynn Resorts because it will give the company full ownership of the subsidiary at a relatively low cost.

Analysts estimate that the deal could add and extra $1 to the company's share price.

The Macau government in 2002 broke casino boss Stanley Ho's casino monopoly on the island by allowing casino licenses to foreign investors including Wynn and Venetian resort owner Sheldon Adelson. The agreements require the companies to develop Macau casinos with local partners.

According to the company's concession agreement with the Macau government, Wynn Macau must have an executive director who is a Macau resident. Also, the director must hold a minimum of 10 percent of the voting shares and capital in Wynn Macau.

Macau businessman Wong Chi Seng will retain voting rights on 10 percent of Wynn Macau shares after the sale, the company said.

Wynn Resorts representatives declined to comment on the filing or explain why the company is buying out its minority partners.

Greff said the Macau government only requires that Macau partners have a voting interest, not a monetary interest, in the foreign casino projects.

The transaction has come after lengthy discussions with the partners, who probably weren't interested in investing more equity in the company over time, Greff said.

Wynn Resorts has about 89.2 million shares outstanding. Shares were up about $1 per share or 2.6 percent in early trading today, to $39.77.