By Jeremy C. Owens
Wynn Resorts Ltd. is spinning off its online-gambling attempt as the casino company seeks to break into more states that are legalizing sports gambling and other online options.
Wynn /zigman2/quotes/208845907/composite WYNN -0.02% announced Monday afternoon that it plans to merge Wynn Interactive with a special-purpose acquisition company, or SPAC, connected with Bill Foley, a billionaire who helped bring the NHL to Las Vegas. Foley’s Austerlitz Acquisition Corp. I blank-check company plans to pay $640 million at an enterprise value of $3.2 billion to take Wynn Interactive public, with Foley’s Cannae Holdings Inc. /zigman2/quotes/200232147/composite CNNE -1.37% backstopping the share redemptions to ensure the process goes through.
“We are confident that this transaction will unlock the tremendous potential of Wynn Interactive to further accelerate growth and enable the business to capture the massive opportunity in North America,” Wynn Resorts CEO Matt Maddox said in a statement. “Bill Foley is the ideal partner to ensure continued success — his track record with business combinations, extensive experience growing marquee consumer brands and partnering to maximize value in businesses like ours will be invaluable as we continue scaling.”
As sports gambling becomes legal in more states, there is a growing competition to offer online options in states that make the move. Wynn competes with Caesars Interactive Inc. /zigman2/quotes/205281174/composite CZR -2.71% and Penn National Gaming Inc. /zigman2/quotes/209264611/composite PENN -3.67% — both of which were recently added to the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.61% — as well as MGM Resorts Intl. /zigman2/quotes/209932643/composite MGM -1.13% , Draftkings Inc. /zigman2/quotes/213120645/composite DKNG +0.47% , Flutter Entertainment PLC /zigman2/quotes/206709455/delayed IE:FLTR -0.14% and others for that business. Wynn said that its WynnBET online offering was currently available in New Jersey, Colorado, Michigan, Virginia, Indiana and Tennessee.
Current shareholders of Wynn would retain 79% of the equity in the deal announced Monday, while shareholders in Austerlitz would take 18% and the SPAC sponsors would receive 3%. The companies said they expect the deal to close by the end of the year, with shares eventually trading on the Nasdaq under the name Wynn Interactive and ticker symbol WBET.
Wynn shares gained about 2% in after-hours trading Monday following the announcement, which was paired with the company’s quarterly earnings report. Wynn reported a first-quarter loss of $281 million, or $2.53 a share, on operating revenue of $725.8 million Monday, after reporting a loss of $3.77 a share on sales of $953.7 million in the same period a year ago. After adjusting for foreign currency fluctuations and other effects, the company reported a loss of $2.41 a share. Analysts on average had expected an adjusted loss of $2.02 a share on sales of $758 million, according to FactSet.