Okada Resigns from Wynn Resorts; Board Fires Him Anyway

Posted on: February 25, 2013, 02:36h. 

Last updated on: March 4, 2013, 09:14h.

As one of the highest-profile casino industry feuds continues its saga, Kazuo Okada this week resigned from the board of directors of the company he helped found with his one-time dear friend Steve Wynn.  The former largest shareholder in Wynn Resorts Ltd. made the resignation move only a day before shareholders were to meet to vote on whether to keep him on as a company director or not.

Bitter Feud

Although he resigned, Okada made it clear to his now bitter enemy Steve Wynn that he is not giving up his battle regarding a forced seizure of his 20% stakehold in the company he helped to create.  Wynn Resorts made the move on his shares following allegations that another Okada venture, Universal Entertainment, had violated U.S. anti-corruption laws when it allegedly made bribes to regulators in the Phillipines.  Okada maintains that Wynn just wanted to force him out so he could essentially control the publicly traded company.

“Going forward, I will continue to focus my efforts on managing [Universal] and ensuring its continued growth,” said Okada. “I remain determined to fight Steve Wynn’s involuntary redemption of my nearly 20 percent stake in Wynn Resorts.”  Wynn Resorts last year seized Okada’s shares at a 30% discount, leaving the Japanese billionaire with a 10-year promissory note that is valued at $1.9 billion.

Even Though You Quit, We Fire You

Apparently to show the former director exactly how they felt about Okada, shareholders immediately voted overwhelmingly to remove him from their board, even though the action was obviously redundant to his resignation the day before. There was no equivocating on the shareholders’ feelings on the matter, though: with 86 million shares voting, Okada’s removal was approved by 99.6 percent of the shares voting at the specially-held meeting in Las Vegas.  Sort of a metaphorical mass flipping of the shareholder bird, it seems.

Okada was not impressed, however. “This special meeting has no purpose and no ability to move the business of Wynn Resorts forward,” he reiterated in an official Universal statement made following the ousting meeting. “We believe that burdening the company and its shareholders with the expense of this meeting also raises questions in terms of legality,” Okada added. In case you didn’t get the point, the Universal statement added that the meeting was the “latest misguided step in Mr. Wynn’s retaliatory campaign to attack and discredit Mr. Okada. [Holding this meeting was a] wasteful charade.”

Cutting Ties

The official shareholder dismissal of Okada cut his last official ties to Wynn Resorts, which he helped launch 13 years ago with a $260 million investment. The 70-yr-old billionaire will remain a major creditor, however, due to the $1.9 billion note to come due in a decade.

Okada was previously removed as a director of Wynn Macau Ltd., a Wynn Resorts subsidiary.

Shareholders’ Confidence Up

Reiterating that removing Okada from the Wynn board was a good move, stocks reacted with a $1.81 per share gain immediately following the meeting; the gain represents 1.57% per share.  Wynn closed on the NASDAQ at $117.34 per share after the meeting.