Apple’s (NASDAQ:AAPL) Steve Jobs could be intolerable, yet he turned out to be one of history’s greatest CEOs. The same goes for Oracle’s (NASDAQ:ORCL) Larry Ellison. These guys could make grown men cry.
Steve Wynn, CEO of Wynn Resorts (NASDAQ:WYNN), also deserves to be in that category. Over the weekend, Wynn made a big-time power play: He forced a buyout of the 20% stake in Wynn Resorts held by Kazuo Okada. In fact, it came at a steep 30% discount. And Wynn will get the cash in the form of a 10-year loan, with a meager 2% interest rate!
How often do you see something like this? In Wynn’s case, it’s certainly part of his take-action approach to business. True, he claimed the deal was necessary because of his fear that some of Okada’s actions would jeopardize Wynn Resort’s gaming licenses (The Wall Street Journal had reports of improper payments in the Philippines).
But there’s probably much more to this. Wynn and Okada were already involved in litigation (concerning a $129 million loan from Wynn to a university in Macau). If anything, it appears Wynn just wanted to find a way to consolidate his power base.
No doubt, more litigation is inevitable. Yet Wynn Resorts’ corporate bylaws allow for a forced buyout. So it could be tough for Okada to fight back.
And Wall Street likes the latest twist as well. In today’s trading, the shares of Wynn closed up nearly 6% to $119.40. Then again, investors probably think Wynn Resorts will face fewer distractions, and they also realize that Wynn himself will never cower from making tough choices. Besides, when it comes to the gambling business, he has a knack for finding massive growth opportunities.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook, All About Short Selling and All About Commodities. Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
