Is MGM Resorts Mulling Over The Wynn Resorts Acquisition?
Zacks Investment Research | Apr 08, 2018 10:49PM ET
Reportedly, MGM Resorts International (NYSE:MGM) might acquire Wynn Resorts, Limited (NASDAQ:WYNN) . In this regard, the company has approached Wynn Resorts through back-channel process, per New York Post. However, shares of MGM Resorts and Wynn Resorts have declined 4.1% and 1.5%, respectively, on Apr 6, 2018.
Per the sources, there is a 50% possibility that the deal might fall in place in the coming few months. In February, James Murren — MGM Resorts’ CEO — had said that the company does not intend to acquire Wynn Resorts.
Notably, Wynn Resorts has become the target of acquisition, following the resignation of Steve Wynn, the CEO and founder of Wynn Resorts. In February, this casino tycoon had to step down after several women complained that they were harassed or assailed by Wynn. However, Wynn denied the allegations on the same day stating that, "the idea that I ever assaulted any woman is preposterous."
We believe the acquisition of Wynn Resorts will not only drive MGM Resorts’ top and bottom line but will further solidify its position in the gaming industry. This is because, Wynn Resorts — one of the leading companies in the gaming and lodging industry — is well poised to grow strategically. Also, it is well-positioned to gain market share with the gradual revival of the U.S. economy. Given Wynn Resorts’ strong brand name, the company seems to be in a better positioned to command a premium rate relative to its peers in the gaming and lodging industry.
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In the past six months, shares of MGM Resorts have rallied 12.2% compared with the Zacks Investment Research
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