Wynn Resorts has paid $2.5 billion to resolve a longstanding legal dispute with former shareholder Universal Entertainment and completed a public offering of 5.3 million shares to Galaxy Entertainment Group to finance the settlement.
The company said it used net proceeds from an $800 million bridge loan, plus cash and $250 million from other credit sources to settle with Tokyo-based Universal and its Aruze USA subsidiary.
The share sale to Hong Kong-based Galaxy generated $915.8 million to repay the bridge loan, the company said.
It also makes Galaxy, a major competitor with Wynn’s three resorts in Macau, a holder of a sizable 4.9 percent of the company’s stock.
The dispute with Universal-Aruze dates back to 2012, when Kazuo Okada, founder of the machine gaming conglomerate and Universal chairman at the time, fell out with Steve Wynn over the former’s desire to develop a gaming resort in the Philippines. Okada was a co-founder of Wynn and a major financier, but when he became enmeshed in a bribery scheme related to the Philippines project he was ousted from the board of directors and his 20 percent of stock was forcibly redeemed at a massive discount.
Those moves sparked a bitter 6-year-long court battle. But then last summer, Okada was removed as chairman of Universal in connection with a series of allegedly fraudulent dealings involving corporate funds; while earlier this year, Wynn was forced out as Wynn Resorts chairman and CEO in the wake of a barrage of sexual harassment accusations and later sold off his 12 percent of the company, paving the way for the two companies to make peace.
Their settlement called for Wynn to make a lump-sum payment to Universal to redeem $2 billion in promissory notes covering the stock seizure and around $464 million in interest.
Universal said it plans to use $1.3 billion of the settlement to pay off two sets of private notes issued in 2015 and 2016.
