Tilman Fertitta’s attorney says new ambassador has no plans to expand investment in Wynn Resorts
Shortly before last week’s Wynn Resorts hearing in Las Vegas, the ex-wife of Tilman Fertitta appeared before the Nevada Gaming Commission remotely via Zoom.
During the brief appearance, the NGC granted a licence to Paige Farwell Fertitta, the former wife of the Houston Rockets owner. Last month, the US Senate confirmed Tilman Fertitta’s nomination as US ambassador to Italy and San Marino. After he pledged to step aside as president and director of Fertitta Entertainment, the NGC approved the promotion of his former wife to both positions with the company.
The NGC also broached Fertitta’s investment in Wynn Resorts hours before the commission approved a $5.5 million fine against the casino. Last November, Fertitta increased his stake in Wynn to 9.9% when he became the company’s top shareholder.
No updates on a key SEC filing
Fertitta’s eponymous Fertitta Entertainment has vast operations. In addition to the Rockets, the American holding company’s portfolio includes prominent restaurant brands such as Landy’s Inc, Rainforest Cafe and Del Frisco’s. On the gaming side, Fertitta Entertainment operates three casinos in Nevada, including the Golden Nugget in Downtown Las Vegas.
In February, Wynn Resorts released a Form 3 filing from the US Securities and Exchange Commission describing Fertitta’s ownership stake. According to the February filing, Fertitta owned 10.9 million Wynn shares and also had the right to buy 1,683,500 shares of common stock at $85.73 per share.
The option expired on 13 May. In a subsequent filing, Fertitta disclosed ownership of 12,600,000 shares in Wynn as of 25 March. The holding amounts to an 11.8% ownership stake in the company. At last week’s NGC hearing, Commissioner Brian Krolicki pressed Steve Scheinthal, general counsel at Fertitta Entertainment, on whether the company has filed a Schedule 13D on the Wynn stake.
A 13D is a filing that details a large stock purchase. Typically, passive investors are unable to file a 13G with the SEC and instead must file a 13D. The latter may be indicative of an attempt at an acquisition.
“Nothing has changed,” Scheinthal said with a hearty laugh. “Fertitta Entertainment and Tilman remain a passive investor.”
Billings on UAE: A substantial market opportunity
Wynn Resorts this month pulled out of the bidding process for a Downstate New York casino licence. The withdrawal could enable Wynn to devote more resources to its project in the United Arab Emirates, the Wynn Al Marjan Island casino resort. Speaking with CNBC in March, CEO Craig Billings indicated that the UAE market could eventually fall within a range of $5 billion to $8 billion in annual gross gaming revenue. The amount, Billings noted, is in line with revenue output on the Las Vegas Strip.
CBRE analyst John DeCree released a research note last November shortly after Fertitta disclosed a new stake in Wynn. In the note, DeCree addressed speculation that Fertitta could pursue a controlling stake given the entrepreneur’s investment in several major restaurant chains.
However, DeCree emphasised that Wynn would be a more “complicated and expensive endeavour”, considering its sizeable enterprise value and international expansion. The analyst specifically alluded to the company’s project in the UAE to illustrate his point.
The Senate confirmed Fertitta’s nomination as US ambassador to Italy by a vote of 83-14. Days later, on 6 May, Fertitta presented his credentials to Italy’s president, Sergio Mattarella. Fertitta is estimated to have a real-time net worth of $10.9 billion, according to Forbes, which ranked him No 241 on its list of world billionaires.
Wynn traded at around $92 a share on Wednesday, down fractionally on the session. While Wynn is up about 11% over the last month, the stock is down roughly 2% over the last 52 weeks.