Wynn Resorts Ltd. plans to raise as much as US$1.63% in a Hong Kong initial public offering of its Macau casino assets. The US gambling company founded by Stephen Wynn plans to sell 1.25B shares for between HK$8.52 and HK$10.08 apiece. The sale would represent about 25% of the Macau business, they said. Wynn’s profit has fallen for the past two years as a global economic slowdown hurt travel and spending at its Las Vegas casinos and hotels. In contrast, net income at Wynn’s Macau operations rose 48% last year as gambling revenue in the only Chinese region where casinos are legal climbed. Global investors are likely to be drawn to the IPO, as it’s the first foreign casino operator to be listed in Hong Kong. JPMorgan Chase & Co., Morgan Stanley and UBS AG were hired to manage the sale, and will begin offering the stock from tomorrow. The price is due to be fixed on Oct. 2. Shares of Macau casino operators listed in Hong Kong have jumped this year. Galaxy Entertainment Group Ltd, the Macau casino operator part owned by Permira Advisers LLP, has more than tripled. SJM Holdings Ltd., controlled by billionaire Stanley Ho and son Lawrence’s Melco International Development Ltd., have each more than doubled. In Q-3 Y 2006, Macau provided US$45M in revenue for Wynn’s, against US$273M from the company’s Nevada operations. Within 9 months, Macau was the bigger money-spinner, and by the Q-2 Y 2008 gamblers in the former Portuguese enclave splurged US$530M at Wynn’s tables and hotels, against US$295M in Nevada. The Las Vegas-based company is selling assets in Macau, the world’s biggest gambling hub, to tap investor optimism that China will lift travel curbs on its citizens to the city later this year, boosting gambling revenue further. Gambling revenue in Macau rose 3% in July from a year earlier, the 1st gain since November, according to government data. In August, it rose 17% to a record 11.3 billion patacas (US$1.4B), Portuguese news agency Lusa reported Sept. 1. Wynn’s net income from its Macau operations may rise 17% next year to HK$2.31 billion, UBS AG analysts Grant Chum and Gary Ngan said in a Sept. 11 report. Profit in 2009 may fall 3%, after a 48% gain in 2008, they said.
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