Wynn Shareholders Do a Double Take
The high-profile breakup of Steve Wynn and his business partner Kazuo Okada is likely to end in an ugly legal slugfest, much to the chagrin of Wynn Resorts (NASDAQ:WYNN) investors, who had welcomed Wynn’s move to buy back Okada’s 20 percent stake in the company at a 30 percent discount.
Analysts and shareholders had looked forward to a salutary boost to Wynn Resorts’ earnings per share as a result of the cheap buyback now thrown into question after Okada vowed to fight it on the basis that the 30 percent haircut was unfair. According to the Wall Street Journal, Okada could also take the stand that he was not given an opportunity to present his side of the case to the company’s board, and that he was singled out because he played whistleblower on a $135 million donation made by Wynn to a Macau university.
Nomura wrote in a note, “We expect a challenge to the fairness opinion. In our view, the cleanest outcome is for a cash settlement somewhere between the $1.9 billion redemption and Friday’s (February 17) $2.7 billion market value.”
According to broker Sterne Agee, the tussle is far from over, and both sides could suffer “additional bruising,” as reported by Dow Jones Market Talk.
Here’s how WYNN shares are reacting to the news:
Wynn Resorts Ltd. (NASDAQ:WYNN): WYNN shares recently traded at $118.45, down $0.95, or 0.8%. They have traded in a 52-week range of $101.02 to $172.58. Volume today was 1,031,122 shares versus a 3-month average volume of 2,595,890 shares. The company’s trailing P/E is 24.34, while trailing earnings are $4.88 per share.
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