Tilman Fertitta Ups Wynn Resorts Stake to Nearly 10%

Posted on: November 14, 2024, 01:28h. 

Last updated on: November 14, 2024, 02:07h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Wynn Resorts (NASDAQ: WYNN) soared Thursday after it was revealed Tilman Fertitta boosted his stake in the casino operator to 9.9%.

Tilman Fertitta
Tilman Fertitta at a Houston Rockets game. He increased his stake in Wynn Resorts to 9.9%. (Image: Yahoo! Sports)

In midday trading, Wynn was almost 9% higher on volume that was more than double the daily average after a regulatory document indicated the Golden Nugget boss increased his investment in the gaming outfit.

A Schedule 13G filing released late Wednesday by the Securities and Exchange Commission (SEC) says Fertitta now owns 10.9 million shares of Wynn, or 9.9% of the shares outstanding in the Las Vegas-based company. That’s a significant increase from the 6.91 million shares, or 6.1% of the operator’s shares outstanding, Fertitta acquired two years ago.

Fertitta Could Turn Into Activist Wynn Investor

When Fertitta, who also owns the NBA’s Houston Rockets, took his initial position in Wynn two years ago, it was as a passive investor and he’s remained that way over that time. Still, there was talk at the time that he could eventually turn into an activist, pushing for some form of change at Wynn. That chatter resurfaced on Thursday.

It’s likely not going to be passive for long,” said CNBC’s David Faber on air. “The high likelihood here is it becomes a D.”

The 13G filing indicates a passive stake while a 13D is the regulatory form required of activist investors. To this point, Fertitta hasn’t said publicly that he’s eyeing an activist role with Wynn, nor has he mentioned what type of change he could push for at the gaming company should he decide to shed the passive label. Some activists push for board seats, though it’s not clear if that’s in the cards for Fertitta. Currently, he’s not a member of Wynn’s board of directors.

Takeover Talk Could Be Reignited

Soon after it was revealed that Fertitta took his initial position in Wynn, rumors surfaced that the Golden Nugget owner could attempt a takeover of the Encore operator. Much of that talk stemmed from Fertitta’s well-documented and long-running desire to own a casino hotel on the Las Vegas Strip — something he currently does not possess.

Those rumors quickly fizzled as Fertitta appeared content to not rock the Wynn and enjoy his status as the second-largest noninstitutional investor in the stock behind only Elaine Wynn. A takeover of Wynn wouldn’t be impossible, though it’s not clear if the company is a willing seller. Based on its current market capitalization of $9.34 billion, any suitor would likely need to offer roughly $11.5 billion (or more) to get Wynn to the bargaining table.

It’s clear that Fertitta’s Wynn investment has been a winner. Based on the original 13G filed in October 2022, he built the stake in the third quarter of 2022 — a period in which the stock didn’t trade above $70. Today, it’s flirting with $94.