Wynn Resorts Ltd. shares opened higher Tuesday as investors absorbed the news from over the weekend that the Las Vegas casino company had involuntarily bought out shareholder Kazuo Okada with a 10-year, $1.9 billion note.
The stock was up nearly 7 percent, at $120.52, as investors weighed the benefits of redeeming Okada’s nearly 20 percent stake at a discount against the uncertainties over what is likely to be protracted litigation over the move.
During a conference call with analysts Tuesday, former Nevada governor and Wynn board member Robert Miller said the company had to disassociate itself from Okada in order to protect its current gaming licenses and the potential for it to obtain gaming licenses in new jurisdictions.
A Wynn investigatory report found Okada had made improper payments to foreign gaming regulators, something that Wynn asserts could be a violation of a U.S. law barring bribes to foreign officials.
Miller said Okada’s conduct made him "unsuitable" and that Wynn Resorts and its directors could no longer associate with him.
"We chose to act in a way that’s clearly in the best interests of this company and its shareholders," Miller said.
Okada has vowed to fight back in court against the Wynn move.