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Sayonara Elaine Wynn

By Chuckmonster on Friday, 24th April 2015 11:31am
  » filed under Las Vegas  comments: 7

   

At its annual meeting of stockholders, Wynn Resorts announced that preliminary results show that Elaine Wynn's bid to retain her long standing seat on the Board of Directors will be defeated.

For those keeping score at home, Steve has eliminated both of Wynn Resorts' co-founders, Elaine Wynn and Kazuo Okada.

Full results of the proxy vote will be announced next week.



Tagged: steve wynn   elaine wynn   divorce court   





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Comments & Discussion:

How long before they force a buyout on her? Of course the lawsuit she has against them in regards to the shareholders agreement is still in play, so perhaps in exchange for her dropping the lawsuit, they don't screw her over in the buyout.

Will Steve lose control of the company if Wynn Resorts buys Elaine's shares? Steve's shares + Elaine's shares = 20%. Steve's shares = only 10%.

It seems like Steve has no intention of ever buying Elaine's shares. He wants to keep control over them forever?

I tend to doubt that Wynn can't force a coupon redemption to force her to sell back her shares... this would amount to a breach of contract in the divorce proceedings. Steve would be using corporate power to steal back what is lawfully hers. This doesn't mean that they won't find a way to do this or at least try.

Right now, Steve and Elaine are required as part of their divorce agreement to vote their shares as a unified block. If Elaine wins the lawsuit and can do what she wants with the shares that are in her name, it will break change of ownership covenants and unleash a tide of credit issues, interest rate readjustments and MAJOR financial headaches for the company right as it is about to engage in expansion.

Instead of the having a solid 21% ownership block of Steve / Elaine, it becomes Steve 11%/Elaine 10% (rough math). If an outsider acquires 12% of the shares (~$2-4b?) ... or more than Steve can afford to finance back, he's toast. T. Rowe Price's hedge fund(s) own a passive stake of ~32% in Wynn. There may be agreements between T Rowe and Steve I don't know about.

One possibility is Elaine puts up her ~9.6% and finds an equity partner to quietly buy 5% or more. She says she has no plans to go against Steve, but with her losing the board seat, the gloves might be off.

Great explanation, Chuck. My question was the same as jucifer's. I'd like to know what Elaine means about continuing to exert her influence "from a position of greater strength." ?

Wish she'd just jump on over to Alon, already, but she must be sort of joined at the hip to Wynn Resorts for many of the reasons you mentioned....

If she gets to vote her shares, she gets to vote her shares. And now since she's not an officer of the company, she can act as an activist investor.

Elaine's money is tied up Wynn, as an officer, she has a fiduciary duty to act in accordance with the corporate by laws. If she's not, anything goes.... at least pending the outcome of her ability to vote her shares.

I can't imagine her being forced to retain her shares and vote whatever Steve wants forever... that isn't ownership that is slavery.

Elaine is probably going to become the Roy E Disney to Steve's Michael Eisner. The SaveDisney campaign of the early 2000s was a similar story, the third-largest shareholder kicked from board, begins a vengeance campaign against the board and it's chairman/CEO.

However, that campaign was only successful in providing a sort of a guidance for the next guy to do. Mikey Eisner got only 60% of the confidence vote, and continued course like no one ever doubted him. I think it would surprise a lot less if Steve shrugged off any dissent so long as he has a simple majority. This is a guy who once called his investors "dumber than I thought" when they couldn't see things his way.

"I can't imagine her being forced to retain her shares and vote whatever Steve wants forever... that isn't ownership that is slavery."

Agreed it's totally outrageous. But how long can Steve drag this out in court? Will the Nevada courts rule in his favor? In Nevada, the house usually wins. If this lawsuit goes to the U.S. Supreme Court, are we looking at a ruling somewhere around the year 2025?

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