Tilman Fertitta, the CEO of Golden Nugget, recently increased his stake in Wynn Resorts to nearly 10%, sparking speculation about a possible takeover. However, according to analyst John DeCree, Fertitta is more likely to remain a passive investor in Wynn rather than pursue an acquisition.
Despite Fertitta’s history of successful mergers and acquisitions, including acquiring Morton’s Restaurant Group and McCormick & Schmick’s, DeCree believes that Fertitta’s increased position in Wynn may simply be a strategic investment rather than a prelude to a takeover. Fertitta’s initial investment in Wynn has already seen a 70% increase, indicating that he may see further upside potential in the shares.
While a 10% stake in a company like Wynn would typically attract attention, it does not necessarily mean that Fertitta intends to take an active role in the company’s operations. Investors like Warren Buffett have held significant stakes in companies without seeking to influence management decisions. Fertitta’s recent move may be seen as a value investment with the potential to become strategic under certain circumstances, such as a downturn in the market.
Despite the speculation surrounding a possible takeover, there are complexities involved in acquiring Wynn, including maintaining gaming licenses in Macau and ongoing projects in the UAE. These factors may influence Fertitta’s approach to any potential changes at Wynn, suggesting that he may choose a more strategic path rather than a direct acquisition.
Recent rumors suggest that Fertitta is concerned about Wynn’s management’s communication of the company’s performance to shareholders and believes that expanding the brand in the US could be beneficial. Currently, Wynn’s US operations are limited to the Las Vegas Strip and Boston Harbor, with a potential expansion into New York City on the horizon.
Overall, while the speculation of a Fertitta takeover of Wynn continues to circulate, the analyst’s insights suggest that Fertitta’s intentions may be more nuanced than a straightforward acquisition. His increased stake in Wynn could signal a long-term investment strategy rather than an immediate takeover bid.
