Feb. 22 (Bloomberg) -- Universal Entertainment Corp. climbed the most in six months in Tokyo trading after the Japanese pachinko machine maker pledged legal action against Wynn Resorts Ltd. over the forcible redemption of its stake.
Universal rose as much as 14 percent, the most on an intraday basis since Aug. 25, to 1,727 yen before trading at 1,665 yen as of the midday trading break. The gain trimmed a record 21 percent drop for the shares on Feb. 20, the first trading day after Wynn said it bought out its largest investor for $1.9 billion or 31 percent discount.
“Universal Entertainment’s rebound means that the market has prepared and taken this into account,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.
Universal said its affiliate Aruze USA, owner of the Wynn stake, would seek a court order to prevent the forced redemption, according to a statement from the company today. Wynn had accused Universal Chairman Kazuo Okada of making improper payments to Philippine gambling regulators and asked him to step down as a Wynn Resorts director.
Okada violated U.S. anti-corruption laws and made cash payments and gifts of about $110,000 to Philippine officials, Wynn said in a Feb. 19 statement. Wynn said it would give Universal a $1.9 billion promissory note for its 19.65 percent stake.
“We have absolutely not provided funds which would be the equivalent to bribes to anyone,” Universal spokesman Nobuyuki Horiuchi said over the phone yesterday.
Universal, which gets about 95 percent of revenue from making pachinko machines, is building a $2.3 billion casino in the Philippines and has said it’s interested in operating casinos in Japan should the government lift its ban.
--With assistance from Dan Hart in Washington, Yi Tian in New York and Joel Guinto in Manila. Editors: Dave McCombs, Frank Longid
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