Money Matters, Simplified.
Wynn to invite IPO for Macau operations
by Kimberly Reid - September 21, 2009 - comments
The company has the support of cornerstone investors who plan to invest approximately $250 million in Wynn's casino business. These include Malaysian billionaire Quek Leng Chan; Walter Kwok, former chairman of Sun Hung Kai Properties Ltd; Lau, brother of Hong Kong billionaire Joseph Lau and CMY Capital Markets Sdn. Bhd
New York, September 21 -- Wynn Resorts Ltd. is seeking to raise as much as $12.6 billion in Hong Kong listing of its Macau casino assets, according to The Wall Street Journal which cited unnamed people familiar with the matter.
The company plans to sell 1.25 billion shares, in the initial public offering, to be priced between HK$8.52 and HK$10.08 a share. The sale would constitute 25 percent of the equity of Wynn's Macau operations.
The Las Vegas-based Wynn Resorts has hired JPMorgan Chase & Co., Morgan Stanley and UBS AG to facilitate the sale process. The price will be fixed on Oct. 1 and would be traded under the ticker 1128 from Oct. 9.
“Macau as a sector is very interesting, very attractive, particularly with all the Chinese tourists,” said Desmond Tjiang, chief investment officer for Asia excluding Japan at Fortis Investments. “There are still a lot of unknowns regarding the supply of gaming tables going forward, the commission rate outlook and also the China government policy on visa” restrictions.
Backing of high profile investors
Since this will be the first foreign casino operator to be listed in Hong Kong, it is likely to attract investors, said Steven Leung, an institutional trader at UOB-Kay Hian Ltd.
The company also has the support of cornerstone investors who plan to invest approximately $250 million. These include Malaysian billionaire Quek Leng Chan; Walter Kwok, former chairman of Sun Hung Kai Properties Ltd; Lau, brother of Hong Kong billionaire Joseph Lau, and CMY Capital Markets Sdn. Bhd.
Wynn optimistic about future despite profit slide
The company founded by Stephen Wynn has witnessed a fall in revenue in the face of global economic slowdown.
The casino operator Wynn Macau Ltd has posted 33 percent decline in first-half net profit ended June 30. The company recorded a net profit of HK$ 903.7 million, a steep decline from HK$1.35 billion for the same period in the previous fiscal year.
Further, the operator expects a fall in net profits for the year 2009 to HK$1.47 billion from HK$2.04 billion in the previous year.
Optimistic that China will relax its visa rules and make it easy for the citizens to travel to Macau, the company is expected to post better results in the coming fiscal year.
UBS AG analysts Grant Chum and Gary Ngan believe that the company’s net income from its operations in Macau is expected to increase 17 percent to HK$2.31 billion next year.