In April, an announcement stated MGM Resorts was showing interest in Wynn Resorts. Now over a month later, the news is much different.
Rumors create misunderstanding, which may be what is happening with MGM Resorts and Wynn Resorts. Analysts feel the Boston Wynn project would be a good buy for the major casino company; however, it does not mean that MGM is showing interest. It is quite the opposite according to MGM spokespeople.
MGM is focusing more on the legalization of sports betting outside of Las Vegas according to the CEO.
MGM Resorts also announced it would be repurchasing $2 billion of its shares. There was no timeline for the buyback of their stock, but it does follow up on an announcement in September 2017, about a $1 billion purchase.
CEO Jim Murren stated the repurchase authorization shows the company’s financial strength and the commitment the business has to its shareholders. They are returning capital to their stockholders, who helped them invest in properties and business growth.
The purchase of the stocks will amount to 10 percent of the company’s total value. However, one must note that repurchasing stock often happens when it is undervalued, and there is strong growth expected in the future.
MGM Rumors Stopped
The repurchase talk should stop the rumors about MGM buying Wynn Resorts. Wynn CEO Matt Maddox was mentioned in a New York Post report that said he was interested in dissolving the company should the correct offer come about. Perhaps, he is still interested in a buy-out, but it will not be an MGM deal.
Even if MGM has $3 billion to spend it would not be enough to buy Wynn Resorts. Murren was quoted saying that it would be difficult that anyone would have enough to buy out Wynn Resorts because it is a large organization, worth a good deal of money.
Wynn Resorts is at the highest stock price it has had since 2014. Thursday, May 10, 2018, the stock closed over $201, which is 23 percent higher than after the sexual harassment allegations flooded media.
Wynn may have suffered, with a February low, but it seems to have rallied.
MGM, on the other hand, is down around $33.37 for their share price. MGM will continue to focus on their domestic operations, such as Borgata in Atlantic City, and the MGM Springfield. Both casinos are in need of attention to bring up sales and recoup construction costs.