Posted on: December 17, 2024, 11:52h.
Last updated on: December 17, 2024, 12:35h.
Tilman Fertitta’s potential appointment as US ambassador to Italy could diminish the chances he takes on an activist role at Wynn Resorts (NASDAQ: WYNN), the casino operator in which he owns nearly 10% of the stock.
Speculation surfaced last week that President-elect Donald Trump is mulling appointing Fertitta as ambassador to Italy. Multiple news outlets picked up the story, indicating there is some credibility to it. The owner of the Golden Nugget casinos has been a steady Trump supporter and benefactor of other Republican campaigns. On Tuesday, a CNBC report noted if the businessman takes the diplomatic post, he’s unlikely to push for change at Wynn.
If he decides to do that, he’s not obviously going to be an activist” in Wynn,” reported David Faber of the financial news network. “My understanding is he’s more leaning towards doing it, but we’ll see.”
Not all ambassadorships carry the same weight, but Italy would be at the higher end of the spectrum given its status as a long-running US ally and as the Eurozone’s third-largest economy.
While the potential appointment of Fertitta to the role isn’t viewed as controversial, the confirmation process can be time-consuming and subjects nominees to intense personal scrutiny, indicating preparation is likely to be a near-term priority for the Houston Rockets owner.
Fertitta Likely to Remain Passive Wynn Investor
A November 13 filing with the Securities and Exchange Commission (SEC) confirmed Fertitta boosted his stake in Wynn to 9.9% from 6.1%, stoking speculation that he could push for change at the casino operator or consider an outright acquisition.
Nearly as quickly as that idea was floated, it was refuted by analysts who noted Fertitta was unlikely to turn activist or pursue an acquisition of Wynn. Those comments were made prior to news of the diplomatic appointment emerging.
While Fertitta now ranks as the second-largest individual Wynn shareholder — trailing only Elaine Wynn — the prevailing wisdom holds that complexities associated with Wynn’s Macau licensing and the development of a casino resort in the United Arab Emirates (UAE), as well as the need for Fertitta to raise significant capital, could keep him from making a takeover offer.
Much of the conjecture pertaining to Fertitta possibly moving on Wynn is rooted in his well-known desire to control a Las Vegas Strip property and his history of turning to activist from a passive investor.
Italy Ambassadorship Could Keep Fertitta Passive
Fertitta already has a lot of irons in the fire. His business empire is expansive, including car dealerships, a slew of restaurants, and real estate interests to go along with Golden Nugget casinos and the Rockets.
Plus, there’s significant attention to detail required to execute a corporate takeover, particularly at the size and scope needed to get Wynn to the bargaining table — something Fertitta hasn’t said he’s interested in pursuing.
Bottom line: with a potential step into the world of international diplomacy looming, it might simply be easier for Fertitta to remain a passive investor in Wynn for the time being.
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