Wynn SPAC Deal Called Off: Is A Buyout Coming?

Two recent developments at Wynn Resorts could signal a buyout coming.

On Friday morning, Wynn Resorts announced it was terminating a previously announced special-purpose acquisition company (SPAC) merger for Wynn Interactive with Austerlitz Acquisition.

The deal was going to bring Wynn Interactive, which owns WynnBet and other assets, public in a move that would have seen Wynn Resorts maintaining a 58% ownership stake.

“With our continued rollout of product features and planned new state launches, including New York, we remain excited about WynnBet’s future,” Wynn Interactive CEO Craig Billings said. “WynnBet’s best days lie ahead of us.”

The called-off merger follows news that Wynn Resorts CEO Matt Maddox is stepping down.

Citron Research shared that the CEO transition could see Wynn Resorts getting bought out and be worth $165 a share.

“The [Wynn] CEO transition is the ultimate ‘tell’ (from superstar to banker) that THE crown jewel of Vegas might finally be up for sale,” Citron Research said in a since-deleted tweet.

Maddox took over as Wynn Resorts CEO in 2018 when company founder Steve Wynn departed. Maddox will be replaced by Craig Billings on Feb. 1. Billings is the current president of Wynn Resorts and also serves as the CEO and CFO of the Wynn Interactive unit.

Why It’s Important

Wynn Interactive has access to a database of 13 million Wynn Reward members and access to state licenses. WynnBet covers 51% of the U.S. population, with 15 states secured and an additional nine states in negotiations.

WynnBet is live in New Jersey and Michigan for online sports betting and iGaming and has online sports betting in Colorado, Virginia, Indiana, and Tennessee.

The deal called off for the Wynn Interactive spinoff could be particularly compelling with the head of that unit now taking over as CEO of Wynn Resorts and wanting to keep the business.

A couple of things could be in play here: an acquirer wanting to buy all of Wynn Resorts, including online sports betting, or the company seeing online sports betting as a high-growth area and wishing to have control of the unit to help it grow.

Private equity names like Apollo Global Management and Blackstone are mentioned as potential suitors by Casino.org. Both private equity companies own Las Vegas strip venues and have added exposure to the sector.

Wynn’s shares were trading at $93.96 at 3:45 p.m. at the time and have traded between $78.55 and $143.88 over the last 52 weeks.

Citron’s $165 price target represents about a 75% premium to Friday’s share price.

This story originally appeared on Benzinga. © 2021 Benzinga.com.

Benzinga does not provide investment advice. All rights reserved.

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