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Possible merger between MGM Resorts and Wynn Resorts

Discussion in 'Casino Industry & Development' started by sabinomarine, Jun 4, 2015.

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  1. sabinomarine

    sabinomarine Tourist

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  2. SH0CK

    SH0CK Stylin' and Profilin' Quasi Tech Admin

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    I'm not so sure it would be an issue. A lot of people have said in the past that it would be nice if Wynn would buy back some of his signature resorts from MGM and expand his presence on the Strip. It's quite possible he gets paid for his properties/company and MGM gives him a nice title and has him be the figure head of the new company. Plus, having some major income coming out of Macau can only help MGM's bottom line.
     
  3. Piggylane

    Piggylane Well-Known Member

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    You can make more money by doing the exact opposite of what Cramer recommends. People lost fortunes on his dry goods shipping recommendations. Why he still has a show is beyond me. Oh, it's CNBC. Now I understand...

    That being said adding WynnCore into the Vegas mix for MGM raises anticompetitive issues and I bet some in Washington will holler about this. Maybe shed a casino or two on the strip? Circus Circus is paid for... Mirage would fetch a huge price.

    Wynn's getting hammered in Macau, took too big a bite and hasn't finished the Wynn Palace yet. I can't see this adding to their balance sheet right away, too much debt from all the ongoing construction and the economy is fragile worldwide.

    Mayor Marty McCheese in Boston already hates him and the gaming commission has approved an MGM casino for Springfield, now there'd be two? Expect that to delay or kill Everett.

    In my opinion this will be something floated, looked at, agreed upon then dropped. But I've been wrong before....
     
  4. Scottndindy

    Scottndindy Low-Roller

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    Numbers in Macau are dismal compared to last year but the properties in Macau are still wildly profitable. Casinos have been and will have to continue to adjust to accomodate the reduction in revenue.

    With that said I don't see Wynn wanting MGM. Wynn already has the most profitable resorts on the strip and if MGM is going to split off any properties it isn't going to be Bellagio, Aria, or MGM which are their top grossing properties. Wynn isn't going to want to bottom feed, and isn't going to want to associate the Wynn brand with lower tier properties.
     
  5. leo21

    leo21 VIP Whale

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    It's a horrible idea and unfortunately, I don't see the gaming board as being strong enough to put the brakes on it. At some point, they should have articulated a max number of casinos a company could own or market share they could have in Nevada. Because they haven't, it makes it hard to say no even though both MGM and CET shouldn't be allowed to gain ground. The only hope to stop it is if some of the gaming boards decide to re litigate the business partners MGM has in Macau. If this is a genuine possibility, I would think it's because Steve Wynn is ready to slowly exit the business altogether. I don't think MGM has the sense to allow Wynn to apply his expertise. They don't treat properties they acquire as well as the ones in their original portfolio so I can see Wynn losing it's luster. At the end on the day, it's a bad idea from a consumer perspective and I hope something stops it.
     
  6. thecarve

    thecarve Misanthrope

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    Is there anything more on this other than a mention by Cramer this morning on CNBC and the single sentence on Cramer's website?
     
  7. marcianofan

    marcianofan Low-Roller

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    I agree completely about Cramer. I'd take more financial advice from Kramer on Seinfeld than Jim Cramer on CNBC. I loved it when Jon Stewart went after him.
     
  8. Dean Martin

    Dean Martin VIP Whale

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    So....reading thru the article I could find I can't tell, who would be buying who?
     
  9. TheCooler

    TheCooler Professional Gambler and the Best Football Handica

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    Merger, not acquisition.

    - - - Updated - - -

    I've been saying for awhile that I would like to see Wynn buy Bellagio back.
     
  10. shifter

    shifter Degenerate Gambler

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    there are no details because it's pure speculation.

    but I can only assume the only reason this would ever happen is if Steve wanted to retire.
     
  11. Packer

    Packer VIP Whale

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    If the stock goes to between 40-60 bucks it might be worth a hostile takeover. Thank goodness I sold out over 100$ ago. But that was pure luck as I had to sell.
     
  12. Chuck2009x

    Chuck2009x VIP Whale

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    I don't see it, MGM has Macau exposure already and Jim Murren has an ego too.
     
  13. LetsDoThis

    LetsDoThis Low-Roller

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    Agreed, with his degenerative sight issues it must be hard on him to not be able be in the spotlight. Retire on a high note Steve before people start doubting his influence and capabilities.
     
  14. Someone

    Someone High-Roller

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    I fail to see how this is a good idea for either brand, but I suppose they could pull it off if they wanted to

    I do not see how it would be good for Wynn though particularly and particularly for Steve and the shareholders

    who in their right mind would want to swap Wynn stock for that MGM toilet paper and especially why in the hell would Steve want to do that and that is what a "merger" would be unless the merger allowed Steve to take his shares (hope for a bit of a pump and MGM is thought to have increased free cash flow with no meaningful debt increase) and the shares move up a dollar or two and Steve dumps 100% of them in a matter of months

    also Steve generally sells at the top of the market and while things are good for Wynn relative to everyone else in the long term picture Wynn shares are down pretty hard in the last few days/weeks and down in a pretty major way since early 2014 when the Asian casino market was flying high and MGM shares are down from that same time period as well about $8 dollars to $20 from $28

    Wynn is down nearly $140 from March 2014....so a year ago would have been the time to make this deal from the Wynn perspective and really from the MGM perspective as well when their shares were valued higher

    the other thing is MGM does not lack high end strip properties, but who knows what they are thinking I suppose they could sell off The Mirage pretty easily and get rid of an outlier as far as properties go and they could even dump Luxor, the trashy castle and Mandalay Bay as well and even dump an Asian property and keep the Wynn properties

    that could give them a lot of free cash in quick succession and get them out of lower end mid tier properties going lower and out of upper mid tier properties going lower

    right now both companies have about an $11B valuation as well

    I am not sure who would be in the market for the properties besides The Mirage with the obvious Phil Ruffin, but properties have been changing hands recently with Tropicana and Hooters selling and Westgate actually still alive and seemingly going to improve and Cosmo selling a little while back

    Wynn might just want out also at this point and perhaps even with the stock down he still sees a lot to compete with in the future with Genting and Elon probably both going to happen right across the street and there is still a lot of blood letting that could happen with CZR being a train wreck and looking less and less like they will just reorganize and stay whole, SLS can't continue like it is (can it?) and Hard Rock, Palms and Rio are all on life support waiting for an offer of some sort from someone (sure as hell not me haha)

    Wynn is so goofy he might sell out, put some money in the bank and walk right across the street and get in with Elon and push that project to the next level.....that is really where he made his money it was building bigger and better coming out of a bad market and selling at the top and then coming back in at a low......but of course just like now is not exactly a top now is not exactly a low as well......but of course this is Vegas Baby!! and even when anyone with an ounce of common sense thinks "damn this is over the top saturated way over valued about to explode" that is when all the really stupid expensive projects start to get built and the really stupid high prices get paid for properties......but of course that is when fortunes are lost as well

    I suppose looking at it there is a slim chance it could actually be very good for Vegas and The Strip

    Phil Ruffin has the money to treat The Mirage properly (if he wanted to), if other outside money came in and bought the Mandalay Bay, Luxor and Trashy Castle and did something with them and of CZR has to sell off some properties (even a few), Genting and Elon both get built and The Cosmo, Tropicana, Hooters and Westgate all at least improve in the aspects they lack in (gaming Cosmo, attractiveness Tropicana and everything Westgate and Hooters) well you have a really competitive market at that point with a lot of players that should not be stretched too thin VS what is going on now with two major players that are both stretched way too thin and one that just sucks right now and a lot of properties they would like to get out of, but can't

    MGM could raise a lot of cash if they have buyers lined up for 4+ strip properties, an Asian property and who knows what else

    hell you could have a "decent" mid tier diversified casino company all on it's own if you bought Mandalay Bay, Luxor, Trashy Castle, Circus Circus, some of the outside Vegas USA properties from MGM and an Asian property from them.....that tells you how stupid MGM has been with what they bought and held and never sold off though much less the crap they have sitting around closed

    het here is an idea all of us here on VMB can round up between 1,000 and 10,000 EB-5 ($500 million to $5 billion) investors and we can buy out Mirage, Mandalay Bay, Luxor, Trashy Castle, Circus Circus Vegas, Circus Circus Reno, half the Borgata, MGM Macau, the Mass License of MGM and a couple of other Southern or Midwest casinos from MGM and maybe scoop up a few CZR castoffs on the cheap and we can all pay ourselves a TON of money in annual salaries, put a bunch of worthless stock out there and take on a hell of a lot of debt, change our last names to Loveman and "give it a go"

    who is in with me?
     
  15. chitownjohn

    chitownjohn High-Roller

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    If Elane sells her shares that could subject Wynn to certain change control covenants that would force WYNN to buy back debt at a premium. This is a risk to Steve and all shareholders so that may be one factor in any "merger".

    Merger is just a friendly word for acquisition but the end result is that one fish swallows the other in this case MGM swallows WYNN. MGM would be smart to retain the WYNN brand, however I can't see Steve in any form of a management role without being the guy and that's not likely to happen.

    Fun to speculate, but I doubt there's anything in play.
     
  16. RPMCanes

    RPMCanes High-Roller

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    I would be OK with him regaining control of Bellagio and Mirage. Circus Circus he would put in front of a wrecking ball within a year if he had his way IMO. He could also give a rat's azz about Treasure Island too.
     
  17. mikeyvegas1

    mikeyvegas1 Low-Roller

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    Everyone is looking at this from the Las Vegas end of it. Macau even after it has had big revenue declines, still is the major source of revenue for Wynn and a lot of MGM. CZR is still hurting since they never got in there. This merger could be a way to compete with LVS, SJM. and Galaxy in Macau. Macau is currently down but long term there is still lots of room to grow where Vegas is a mature market.
     
    Sons 21st birthday trip
  18. Someone

    Someone High-Roller

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    but there are still too many issues

    if it is a "merger" that means Wynn has to take the stock of MGM and there is no way Steve wants to get stuck with that crap long term or probably past a couple of weeks

    there is no way Steve wants to step in and run all those garbage properties MGM still clings to

    I am positive that people at MGM would feel that Aria and Bellagio are on the same level with and compete with Wynn properties and I am sure they would believe that The Mirage and MGM are just a very small level below or even competing with on some levels so adding Wynn to their portfolio makes them super top heavy and while growth for Vegas might be at the top that is still a very top heavy mix, in Vegas and on The Strip

    plus with Genting and Elon coming on and Cosmo finally with owners that seem to want a casino that is competition right next to both the Wynn and MGM top tier properties

    that is a massive amount of duplication especially in Vegas just to get a hold of Macau properties and if Wynn cashed out quickly who is going to buy his massive block of shares if he looks to dump them......Wynn is worth $11B and MGM $11.4B so Wynn would own almost half the company (or Wynn shareholders would) and Steve would own a huge chunk of that and no Wynn shareholder wants to own MGM especially the above with top heavy in Vegas facing deep pocketed competition at the top tier coming soon......if the wanted to own that they would own MGM now not Wynn

    this would be a $22B company with a ton of shareholders bailing rapidly along with the better management which would make it probably a $17B company or less after the shares took a dive maybe less

    if Steve wants out it would be better to just sell his Wynn shares on the market VS typing up with crap like MGM and all their issues
     
  19. mikeyvegas1

    mikeyvegas1 Low-Roller

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    Steve may be on his way out and that could have something to do with it since he probably would not take a back seat. I still think that this is more to do with Asia then Vegas. I think Wynn share holders own the the stock to make money and don't care if they will now own Luxor or Excal. If the move makes the company more profitable there is not gonna be a rush of selling just because luxor and excal are now under there ownership. Japan which some say will be the second largest gaming market after Macau is slowly working on legalizing gambling. Like in Macau where they only have like 6 gaming licensees they will only have a few in Japan. LVS Marina Bay Sands where the President visited and said he wants to be the model for Japanese casinos will likely get one. That may only leave 1 or 2 more especially to start out. This move could make them more likely to win one of them which is far more valuable the not being associated with the low end strip casinos.
     
    Sons 21st birthday trip
  20. Someone

    Someone High-Roller

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    it is not about wanting out because of Luxor and The Castle it is about wanting out because MGM is in massive debt and does not exactly have the best management unless you compare then to Caesars and they have terrible management compared to Wynn and LVS
     
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