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Best of Liz Benston

Gaming Guru

Liz Benston
 

Country Club Board Rejects Wynn Offer

6 July 2004

The Las Vegas Country Club board of directors last week passed on an offer by Steve Wynn to buy the golf club after Wynn increased his bid by about $13 million.

Wynn Resorts sent a letter to club members June 18 offering to buy memberships for $50,000 each, or about $40 million. Wynn increased that offer June 29 to $70,000 per membership and clarified several questions the board had raised about the bid, said Kim Sinatra, a representative of Wynn Resorts subsidiary Wynn Golf. The board voted last week to let the Wynn offer expire with no response, she said.

Sinatra said the company isn't prepared to increase its bid again.

"They didn't counter (the offer); they just said no," she said.

Las Vegas Country Club General Manager Dale Telford could not be reached for comment this morning.

In his bid, Wynn enclosed a proxy statement for members to complete and return with their vote. The country club's board of directors criticized the offer as "hostile" because it was made directly to members without the board getting a chance to review it first.

Sinatra called the process "frustrating."

"We're not sure the members are getting to make the decision," she said. "The board of directors of any corporation has a fiduciary duty to their shareholders. They are supposed to reflect the desire of members."

Sinatra said she has received back proxy statements from members that is short of the two-thirds majority needed to vote on major matters but indicates "there's some interest" in selling.

Some country club members have said they aren't interested in selling at any price because they value their private equity memberships. But other members have said they would be willing to sell at the right price, she said.

In a letter to members last month, the country club board said the last appraisal of the country club's real estate, calculated on the basis of a golf club operating fee for play, was "dramatically higher" than Wynn's offer. But Wynn's letter to members says the offer represents a 150 percent premium over current resale prices of $20,000 per equity membership.

The status of other recent offers wasn't clear as of today. One bid, which has yet to be voted on, includes a plan to develop residential high-rise towers along Joe W. Brown Drive.