Wynn Resorts shares climb after Maddox moves into CEO slot


(Reuters) – Wynn Resorts Ltd (WYNN.O) shares jumped 10 percent on Wednesday, as investors approved of the casino operator’s decision to give company veteran Matt Maddox the top job, replacing casino mogul Steve Wynn who resigned following sexual misconduct allegations. Wynn, 76, who has denied the accusations, stepped down as CEO on Tuesday. He, however, is Wynn Resorts’ largest shareholder and owns about 12 percent of the company. Wynn’s decision removes some overhang from the stock, which has lost nearly a fifth of its value since Jan. 26 when reports of the allegations first surfaced, analysts said. The resignation could reduce the risk of tarnishing the company’s brand, Morningstar analyst Dan Wasiolek said. “Our view that Wynn Resorts is likely to retain its gaming licenses is buoyed by Steve Wynn’s removal … given that gaming commission investigations of suitability appear to be centered on allegations against the company founder,” Wasiolek said. Gaming regulators in Nevada and Massachusetts are investigating the allegations. Still, Maddox has big shoes to fill. Wynn started in Las Vegas casinos in the 1960s, creating some of Las Vegas’ most iconic landmarks. Slideshow (3 Images)He was forced to sell his multi-billion dollar operation Mirage Resorts, which included trophy hotels like the Bellagio, to tycoon Kirk Kerkorian in a hostile takeover in 2000. Kerkorian then created MGM Mirage and Wynn went on to create Wynn Resorts in 2002. Wynn’s shares have risen more than 15-fold since its initial public offering in 2002. TAKEOVER TARGET? Wynn, known for building luxury resorts, and the surging profits from its Macau business make the company a lucrative takeover target for real-estate focused companies and Chinese investors, analysts said. “We continue to believe that Mr. Wynn’s quintessential strength lies in his resort design abilities,” said Gabelli & Co analyst Adam Trivison. “So much so that his resorts have demonstrated superior performance under the management of others, i.e. Bellagio, and thus would hold their value in an M&A scenario, which admittedly is more likely given Mr. Wynn’s departure,” Trivision said. The previous experience of Maddox – working in corporate finance in Caesars Entertainment and as a banker for Bank of America Securities – may come in handy while planning the company’s future. Maddox, 42, moved to the Chinese-controlled territory of Macau soon after Wynn Resorts secured its concession there. He has been with the company since it was founded 16 years ago and was named president in 2013. He has taken an increasingly active role in investor conference calls and discussions over business operations. Reporting by Rachit Vats and Ankit Ajmera in Bengaluru and Farah Master in Hong Kong; Editing by Sayantani GhoshOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters