Despite the rumor, an MGM-Wynn merger is off-base

CNBC host and financial gossipmonger Jim Cramer set the gaming investment community aflutter last week.

Cramer told his “Mad Money” audience there was “speculation” that Wynn Resorts Ltd. “might merge” with MGM Resorts International.

The report was repeated on TheStreet.com website, where Cramer is a founder, director and the largest shareholder.

There was zero substantiation, and he didn’t cite sources. It was never explained which company would be the buyer.

The Wall Street gaming analyst community ignored Cramer’s report. Wynn Resorts spokesman Michael Weaver and his MGM Resorts counterpart Clark Dumont both laughed off the story and declined comment.

Motley Fool, the multimedia financial-services company, made light of the rumor. Writer Travis Hoium said over the weekend that “it may be fun to speculate about a deal between Wynn and MGM, but at this point it’s unlikely that one is imminent.”

The companies operate in the same markets — Las Vegas and Macau — and are planning hotel-casinos in Massachusetts. Combined, Wynn-MGM would have a market capitalization of $22.52 billion and annual cash flow of $4.04 billion. But it would also have Caesars Entertainment-like debt of $19 billion.

The notion of a Wynn and MGM merger is ludicrous.

So why bring it up a week later?

A day after Cramer floated the nonsense, TheStreet.com and other Internet financial sites credited the report with sending shares of Wynn up 7 percent.

Talk about tooting one’s own horn.

That same morning, however, J.P. Morgan gaming analyst Joe Greff told investors in a research report that Wynn, which fell below $100 per share earlier in the week — the company’s lowest stock price in five years — was greatly undervalued and presented a buying opportunity.

Greff’s comments carried a little more weight.

Macau’s cratering casino market is the primary reason the stock prices of Wynn, MGM and Las Vegas Sands Corp., have bounced around. Last week, Credit Suisse in Hong Kong advised there were signs of rebound coming from Macau. The three companies saw their stock prices jump.

On Monday, Sterne Agee gaming analyst David Bain said the first week of Macau’s June gaming results were less than spectacular and the market was facing a 13th straight monthly gaming revenue dip. Shares of Wynn, MGM and Las Vegas Sands all gave back the value picked up a few days earlier.

Cramer’s unattributed rumor might have sparked some attention in Wynn and MGM, but the ride on the Macau roller coaster is driving this bus.

The idea of a Wynn-MGM combination is a little tough for anyone to imagine.

Remember, there is a history between Wynn Resorts Chairman Steve Wynn and MGM Resorts. In 2000, Wynn sold Mirage Resorts to MGM Grand for $6.4 billion, and with it, his treasured Bellagio and The Mirage.

As Wynn now tells the story, MGM founder Kirk Kerkorian “did him a favor” by negotiating a price of $21 a share for Mirage Resorts and the assumption of $2 billion in debt.

Wynn took the money, bought the Desert Inn and created Wynn Resorts.

So Wynn, at age 73, wants to more the quadruple the size of his company?

At the same time, MGM Resorts has accomplished a turnaround since the recession when development of CityCenter brought the company closer to bankruptcy than Chairman Jim Murren cares to remember.

MGM Resorts’ balance sheet is now strong, $12.54 billion long-term debt is manageable, and construction of new resorts is underway in Springfield, Mass., National Harbor, Md., and Macau. MGM’s nongaming investments on the Strip, such as a $350 million sports arena, are drawing praise from Wall Street.

Taking on Wynn at this point in the game would be ridiculous.

So why would Cramer, who also manages the Action Alerts PLUS Charitable Trust Portfolio, float the rumor? CNBC and Cramer representatives didn’t respond to emails seeking comment.

Would Wynn like to reclaim his spacious office at the Bellagio that is now occupied by Murren? Does Murren want to move his corporate address to Wynn’s equally plush office at Wynn Las Vegas?

The signs are doubtful.

So where was Wynn when these imagined merger talks started?

According to Akorda.kz, the official website of the president of Kazakhstan, Wynn met on May 25 with President Nursultan Nazarbayev in the country’s capital of Astana. The website provided a photo of the two men talking at a conference table.

Nazarbayev’s press office said the two discussed tourism and hotel development in Kazakhstan. They also touched upon, according to the report, the possibility of cooperation on joint projects.

It doesn’t sound like the Bellagio was one of those ventures.

One could suppose there is a “Borat” joke somewhere in that statement.

Howard Stutz’s Inside Gaming column appears Wednesdays and Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. Find on Twitter: @howardstutz

ad-high_impact_4
Business
Mecum Car Auction in Las Vegas
The Mecum Auctions is held at the Las Vegas Convention Center. Bizuayehu Tesfaye/ Las Vegas Review-Journal @bizutesfaye
Construction underway for new Google Data Center
Henderson is slated to be home to a new Google data center in December 2020. The Governor’s Office of Economic Development approved $25.2 million in tax abatements for Design LLC, a wholly-owned subsidiary of Google. The company plans to build the data center on 64 acres of land on Warm Springs Road west of Boulder Highway.
Anthony Rufo talks about his new product, an in-home digital companion and monitor.
Anthony Rufo talks about his new product, HAPPIE Home technology, an in-home digital companion and monitor designed for unpaid family caregivers that gives personalized alerts, messages and reminders. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Holiday parades help bring shoppers to Downtown Summerlin
Sports Town USA floor manager Angela Gardonio talks about the work that goes into the Downtown Summerlin holiday parades and how they benefit her and other businesses there.
Final vote on CG Technology
Final commission vote on the $2 million settlement for CG Technology.
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center will showcase 13 small businesses in November and December and seven in January. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
T-Mobile uses ticketing data to plan for event
T-Mobile Executive Director of Arena Operations explains how ticket sales data and demographics help plan staffing, vendors, parking and operations for an event.
Costco opens its doors in southwest Henderson
Costco has opened its fifth Las Vegas-area location near the intersection of St. Rose Parkway and Amigo Street. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas strip mall and office park
The Krausz Cos. and WG Group bought a strip mall and an office park in Las Vegas for nearly $80 million total. They acquired a portion of Tropicana Beltway Center in the southwest valley for $59 million. They also acquired the Westbay office complex in the Las Vegas Medical District. The buyers are former owners of The Gramercy, a once-mothballed mixed-use project in the Las Vegas suburbs. They sold The Gramercy in phases for more than $100 million.
Mario Barth talks about the growth of the tattoo industry
Celebrity tattoo artist and business owner Mario Barth talks about the growth of the tattoo industry at The World of Tattoo industry trade show at Planet Hollywood in Las Vegas
$7.5M Las Vegas pot dispensary opens near Las Vegas Strip
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. It has entertainment including an interactive floor and floating orbs. (K.M. Cannon/Las Vegas Review-Journal)
Caesars CEO to step down next year
Caesars Entertainment Corp. CEO Mark Frissora will leave the casino company in February. Frissora has been CEO since July 2015. He was named CEO right after Caesars' operating company filed for Chapter 11 bankruptcy protection Caesars Entertainment emerged from bankruptcy protection in October 2017 Before Caesars, Frissora spent seven years as chairman and CEO of Naples, Fla.,-based Hertz He led the consolidation of the rental-car industry through Hertz‘s acquisition of the Dollar Thrifty Automotive Group.
Planet 13 in Las Vegas adds twist to marijuana dispensary look
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. The dispensary is located near the intersection of Desert Inn Road and Sammy Davis Jr. Drive, near Trump International, in Las Vegas. Planet 13 has plans in the future for a coffee shop, a tasting room for marijuana-infused beer and wine, a lounge for consuming marijuana on site if that is legalized and space for food.
Caesars Entertainment opening 2 resorts in Dubai
Cove Beach will open on Meraas’ Bluewaters Island in Dubai in November and Caesars Palace Bluewaters Dubai and The Residences at Caesars Palace Bluewaters Dubai will open in December. (Caesars Entertainment)
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like