Steve Wynn has been handed several victories by the courts against former partners, including wins in Macau and Nevada. This could serendipitously lead to a Wynn casino in Japan, where gaming just became legal.
Courts in both Macau and Nevada in July dismissed a $1 billion lawsuit by Wynn’s former partner Kazuo Okada, whom Wynn ejected from Wynn Resorts Ltd. five years ago, claiming that he had bribed gaming officials in the Philippines. He also turned aside a claim by ex-wife Elaine Wynn. She had claimed he improperly caused her to be removed from the company’s board of directors.
These victories could make Wynn a hard target for a hostile takeover, something he has experience with, having lost Mirage Resorts to such an action 17 years ago. This would, so the theory goes, make it easier for him to obtain a license to operate in Japan.
Prior to Wynn’s victory over Okada, his own company Universal Entertainment Corp. pushed him out for allegedly misusing funds. Relations between Wynn and Okada started deteriorating seven years ago after Wynn’s divorce cut his share in the company and made Okada the largest shareholder. Not large enough to withstand Wynn’s effort to push him out, however.
In Okada’s lawsuit against Wynn he claimed Wynn Macau should be dissolved because it allegedly engaged in illegal activities to get a casino license for the Macau Cotai Strip. He lost that case. Wynn then won a case with the Nevada Supreme Court that made it harder for Okada to obtain information on how Wynn was able to engineer his ouster on bribery allegations by forcibly redeeming his shares.
Okada hasn’t given up on that quest. However, an attorney for O’Melveny & Myers told Bloomberg, “A lot of the battle is framing the dispute in the way most favorable to your side. Wynn has taken control of the narrative and Okada and Elaine Wynn have been restricted to fighting defensive battles.”
Japan’s government is holding hearings on regulations that would oversee the new casino resorts being allowed in the country.
Meanwhile, Wynn Resorts has been upgraded to buy from hold by analysts at Deutsche Bank. “Our checks give us confidence that the reconfiguration of the mass floor has stimulated improved mass play,” the analyst team said in a note. “Accordingly, we think 3Q17 consensus forecasts are beatable and we believe out period upward revisions will drive shares higher.”
The firm said “continued VIP strength will drive positive Macau market GGR revisions” and “stocks will follow Macau market GGR.” It raised the price target from $138 to $150.
