Wynn Resorts Limited announced it has signed a deal with Universal Entertainment Corporation for $2.4 billion shares of Wynn Resorts stock. Universal Entertainment Corporation is a Tokyo gaming machine manufacturer which made its fortune in the pachinko parlor industry.

Jun Fujimoto, the current CEO of Universal Entertainment, said in a statement that the agreement did not involve company founder Kazuo Okada in any way. Universal’s CEO said, “Kazuo Okada is not a party to the settlement agreement and nothing in the settlement agreement is intended to be construed as giving a release of any kind to Kazuo Okada.”

Fujimoto added, “Further, the company and Wynn Resorts [Limited] have agreed to reasonably cooperate with each other in any future litigation against third parties.”

The agreement released Universal Entertainment Corporation from a stockholders agreement signed by Kazuo Okada in 2010. The 2010 stakeholders agreement stated that Kazuo Okada and Universal Entertainment could not cash out his shares of Wynn Resorts until 2020. The deal ends years of contention between the US and Japanese gaming companies.

$2.4 Billion Agreement on Stock Buyback

Instead, Wynn Resorts will pay Universal $2.4 billion by the end of March 2018. The deal involved 24.55 million shares, which was purchased originally through Universal’s subsidiary, Aruze USA Incorporated, which is based in Honshu.

Though Kazuo Okada and Steve Wynn had been business partners to that point, the share purchase appears to have soured the relationship. Instead of partners, Wynn and his board of directors now saw Okada as a rival.

Kazuo Okada’s 2010 Purchase of Wynn Stock

When Steve Wynn and his board of directors learned Okada’s purchase made him the biggest single shareholder in Wynn Resorts, he was forcibly removed from the board in 2010. Two years later, after Okada’s alleged role in a Philippine bribery scandal became known, Wynn Resorts caused him to forcibly redeem his stake in Wynn at a discount.

Kazuo Okada sued in 2012. That lawsuit has been winding its way through the Nevada court system for the past 6 years. Throughout much of that time, the 76-year old Steve Wynn seemed to have the upper hand in the court battle against his Japanese rival and former business partner.

2012 Forced Redemption

In fact, the forced redemption’s clause that bound the shares for 10 years was effective enough that it thwarted a second lawsuit — this one filed by Elaine Wynn, Steve Wynn’s ex-wife, in 2014.

Elaine Wynn received $1.6 billion in Wynn Resorts shares from her 2011 divorce from Steve Wynn, but was unable to redeem them. This led to a second lawsuit which would have implications for the current deal, while exposing Steve Wynn himself to major repercussions.

Elaine Wynn’s Lawsuit

Elaine Wynn sued in 2016 to have her shares redeemed immediately, or at least on a time table similar to Kazuo Okada. By that time, the Las Vegas casino company’s board of directors had voted for Elaine Wynn’s removal from the board.

Everything changed in February 2018, when Steve Wynn had to step down as the company’s chief executive. Suddenly, Steve Wynn needed to cash out $2 billion of Wynn Resorts stock, because his connection to the company could cost Wynn Resorts billions of dollars in investments, due to licensing concerns in Macau, Massachusetts, and Nevada. Steve Wynn’s resignation stemmed from a wide-ranging misconduct scandal first reported in the Wall Street Journal.

Steve Wynn claimed the allegations made against him stemmed from Elaine Wynn’s lawsuit. If so, the unwillingness to settle his former wife’s grievances cost Steve Wynn the very corporation he founded — plus a variety of honors, TV show appearances, and political influence.

Steve Wynn Stock Buyback

With Steve Wynn needing to redeem his Wynn shares, it became expedient to buy back Kazuo Okada’s shares immediately. Earlier in March 2018, Wynn Resorts and Steve Wynn sought to have clauses of the earlier redemption agreements waived by a Nevada court. Elaine Wynn refused to support that motion, as her lawyers claimed Wynn Resorts wanted a limited waiver that would not have helped her cause.

That defeat in court seems to have caused Wynn Resorts to reevaluate its legal standing and propose to buy back Kazuo Okada’s $2.4 billion shares. With his Nevada case ended, certain legal complications would be resolved.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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