In a USD 927.5 million investment

Galaxy Entertainment 'passive investor' in Wynn Resorts with 4.9% stake purchase

Since Macau regulations restrict the city's six casino companies from holding stakes of 5% or more in each other. Deputy Chairman Francis Lui Yiu-tung has said that Galaxy would not take a seat on the Wynn Resorts board.
2018-03-29
Reading time 1:33 min
Since Macau regulations restrict the city's six casino companies from holding stakes of 5% or more in each other. Deputy Chairman Francis Lui Yiu-tung has said that Galaxy would not take a seat on the Wynn Resorts board.

According to Deputy Chairman Francis Lui Yiu-tung, Macau casino operator Galaxy Entertainment Group has bought a 4.9% stake in Wynn Resorts, parent company of Galaxy rival Wynn Macau, for $927.5 million, as founder Steve Wynn sold off his entire 11.8% stake after resigning from management amid allegations of sexual misconduct.

Wynn Resorts agreed on March 8 to pay Japan's Universal Entertainment $2.4 billion to settle a dispute over the forced redemption of Universal's stake in Wynn Resorts in 2012. Funds raised from the share sale to Galaxy will go to the cost of the settlement.

"It was a very quick window for us to make the decision" to invest, Lui told the Nikkei Asian Review in an interview in Hong Kong. "We are very lucky. It was a good opportunity to buy into a prestigious company. They have great quality assets, they are one of the better-run companies in the world and we are happy that we are able to buy a small part of them."

Lui said that Galaxy would not take a seat on the Wynn Resorts board. "We are a passive investor and would like to leave it at that for the moment," he said. Macau regulations restrict the city's six casino companies from holding stakes of 5% or more in each other.

The Nevada Gaming Control Board is now conducting background checks on Galaxy. Lui expressed confidence that no problems will be found.

"Galaxy is a blue-chip company," he said. "We are fully transparent. The regulators always have the right to look into things that might interest them. I am not worried at all."

Wynn's exit from his company came amid worries that his continued presence as a major shareholder could affect Wynn Resorts' licenses in Macau and the U.S., though he has denied the allegations against him. Wynn Macau's gaming concession will expire in 2022.

Asked whether having Galaxy on Wynn Resorts' share register will help prospects for its Macau renewal, Lui said: "It is a win-win. Yes, I think we have given them something they value and I think in return we are investing in a very nice company."

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