MGM Resorts International (MGM) is reportedly preparing a bid for rival casino giant Wynn Resorts (WYNN).
XThe gaming giant has made inquiries in the form of back channel approaches, sources told the New York Post.
But shares of Wynn Resorts closed down 1.5% at 178.49 on the stock market today after rising to 184.65 intraday. It holds an excellent IBD Composite Rating of 97, putting it in the top 3% of stocks. It also leads the Leisure-Gaming/Equipment Group, though MGM Resorts is a much larger company.
Wynn Resorts stock has been forming a cup with handle base over the past eight weeks, and is nearing a correct entry point of 192.85, MarketSmith analysis shows. It has a market cap of $19 billion.
MGM stock dropped 4% to 34.13, diving bacl below its 50-day line. It has been consolidating over the past eight weeks, and retook its 50-day line Thursday. The buy point is 38.41. It is also lagging the leaders, with a Composite Rating of 66. It holds a noticeably poor EPS Rating of just 39.
Rival gaming giant Melco Resorts & Entertainment (MLCO) fell 1.6%, and Las Vegas Sands (LVS) retreated 2.7%.
MGM CEO James Murren had said in February it was unlikely his company would bid for Wynn. But he may be seeking to take advantage of the shock departure of founder Steve Wynn. He quit as CEO after sexual misconduct allegations emerged and has now sold off all of his stock in the company. Some analysts had speculated that the company could ultimately be sold.
MGM Resorts Has Even Odds
An insider told the Post there is a 50% chance a deal will be made within the next several months. However other sources said no official talks had taken place and stressed MGM management could change its mind.
Casino stocks failed to get a boost Monday despite Chinese gambling mecca Macau reporting strong gaming revenue growth for March, though they picked up Thursday.
Macau, which is China's only legal casino hub, saw sales shoot up by 22.2% to 26 billion patacas ($3.2 billion). That easily topped views of 13% to 18% growth. The world's largest gambling area is the top revenue driver for Wynn Resorts, Melco Resorts & Entertainment and Las Vegas Sands. It's also important for MGM Resorts, though that company is more Vegas-centric.
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The post MGM Resorts International May Bet Big On Bid For Wynn Resorts appeared first on Investor's Business Daily.
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