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2018-03-23 HKT 17:43
Macau gaming giant Galaxy Entertainment has announced the surprise purchase of a stake in rival Wynn Macau, as it emerged that embattled founder Steve Wynn had sold his entire remaining stake in the company.
Galaxy paid US$927.5 million for 5 percent of Wynn Macau, which will boost its position in Macau.
"It is an honour to have such a distinguished company as Galaxy Entertainment as a shareholder which shares many of the same core operating philosophies and values," said Wynn Resorts CEO Matt Maddox in a joint statement.
"Over the longer run, Galaxy may be a potential acquirer of Wynn Macau, and the initial purchase gives Galaxy a first bite at the company," said a note by analysts at Sanford Bernstein & Co.
The note added Galaxy – which is controlled by Hong Kong tycoon Lui Che-woo – may not want to buy all of Wynn Resorts but "a Galaxy acquisition of Wynn Macau assets would create the leading Macau gaming company".
Galaxy owns a number of resorts in the city, including the popular StarWorld and Galaxy Macau.
The Las Vegas-based firm also said founder Wynn had sold his entire stake for more than US$2 billion, almost two months after he stepped down as chairman and CEO in the wake of allegations of decades of sexual misconduct.
The company's licence is up for renewal in 2022 and analysts said pressure and scrutiny on the casino's status, which has been marred by the scandal, may ease with its founder's departure.
The 76-year-old former business rival turned political ally of President Donald Trump resigned in January from his role as Republican National Committee finance chairman, a post he had assumed after his friend took office last January.
Wynn has denied the allegations and accused his ex-wife Elaine of instigating them as part of a "terrible and nasty lawsuit" seeking a revised divorce settlement. (AFP)