Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Wynn Resorts, Limited (WYNN) Steps Closer to Big Share Buyback

Wynn Resorts, Limited (NASDAQ:WYNN) is one step closer to making one of the strangest, most profitable share buybacks in corporate history. A year ago today, the company announced that it was redeeming Kazuo Okada’s 24-million-share stake in Wynn Resorts due to improper actions with Philippine officials, invoking a clause that allows the company to buy back the shares.

The company issued a 10-year, $1.9 billion promissory note with an interest rate of 2% to Okada. The note was a discount to the $2.77 billion market value of his stake at the time, a value that is up slightly in the past year.

Wynn Resorts, Limited (NASDAQ:WYNN)The news on Friday involved a U.S. District Court ruling that Okada couldn’t stop a special meeting of shareholders on Feb. 22 to remove him from the board of directors. Other legal suits are pending, but this is another step toward ousting Okada.

Rules that stung Okada
The rule that Wynn Resorts is evoking isn’t any different from what MGM Resorts International (NYSE:MGM), Caesars Entertainment Corp (NASDAQ:CZR), or Las Vegas Sands Corp. (NYSE:LVS) have on the books. Regulators force directors, large shareholders, and the company itself to have appropriate business relationships, and shareholder rules follow.

MGM was forced to sell a stake in the Borgata due to state regulators finding its venture in Macau unsuitable. Las Vegas Sands says in its annual filing that both Nevada and Macau regulators can punish the company for even paying dividends to an unsuitable shareholder.

Fight not over
This isn’t the last we’ll hear of the Okada battle with Wynn Resorts, but it is one step closer to being over. If it is completed as the company plans, it will be one of the great share buybacks in history: a discount to market value and a 10-year payout for shareholders.

The article Wynn Steps Closer to Big Share Buyback originally appeared on and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of Wynn Resorts, Limited. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!