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| | Zenith in a Wynn Win Situation By Robert Warne - November 4, 2002Even though Stanley Zax never hung out with Bugsy Siegel, on the Vegas strip he gets his share of respect. On the Vegas scene in 1970, Zax was instrumental perpetuating Siegel’s desert oasis vision when Hilton purchased the Flamingo resort casino.
Now poised to write another chapter in Vegas history the Zenith National Insurance Corp. Chairman, Zax, placed his latest bet by anteing up a sack of gold on Le Reve, the latest Steve Wynn Vegas venture.
Zax told the Los Angeles Times that what he’s learned from 35 years of studying Vegas is, “One, Steve Wynn proved he can make money there. And second, major new hotels have always done well there, as first proved by Kirk Kerkorian.”
It was Kerkorian who sold the Flamingo to Baron Hilton, which was his first resort and gaming venture in Vegas. At the time Zax was Hilton Hotels Corp.’s general counsel.
While at Hilton, Zax met Wynn who was a wine distributor on his way to making a name for himself for developing strip spectacles like the Bellagio, the Mirage, Treasure Island and the Golden Nugget.
In the 1980s, according to the Times, Zax hooked his cousin Michael Milken up with Wynn, who at the time was chairman of Golden Nugget Inc. Milken who gained notoriety from a decade of successful gambles on junk bonds came up with $100 million to build a hotel-casino in Atlantic City.
In 2000, Zax acted as Wynn’s consultant in his sale of Mirage Resorts Inc. to Kerkorian’s MGM Grand Inc. for $6.4 billion.
Zenith’s investment of $13 million in Le Reve bought 1 million shares of Wynn Resorts Ltd., which accounts for approximately 2.9% of the total 34.6 million shares sold.
All of Vegas’ grand scale projects come with its share of skeptics. And in this case many associate Wynn with extravagant spending and cost overruns.
One of Zax’s advantages is that as a director on the Wynn Resorts board, he will be able to see Zenith’s investment through Le Reve’s 2005 opening.
As a Vegas boomtown pioneer, Zax has had a hand in shaping Vegas into what it is today. From his years of experience he’s learned according to the Times, that when placing a bet it is important to back a proven winner, especially when the odds improve. |