International edition
September 27, 2020

The road show for the share sale will start today

Wynn Resorts to raise us$ 1.6 billion in Hong Kong IPO of Macau casino assets

(Macau).- Las Vegas-based casino operator Wynn Resorts plans to raise up to us$ 1.6 billion in a Hong Kong initial public offering of its Macau assets, a person familiar with the situation says.

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ynn Resorts, run by Steve Wynn, whose namesake luxury casinos operate in Las Vegas and Macau, plans to sell a 25 % stake in Wynn Macau by selling 1.25 billion shares in an indicative range of us$ 1.09 to us$ 1.30 per share, the person said.

The price range represents between 12.5 and 14.5 times Wynn Macau's forecast 2010 earnings before interest, taxes, depreciation and amortisation, according to the person, who declined to be named. The road show for the share sale will start today, with listing slated for October 9.

As part of its IPO, Wynn has agreed to sell us$ 250 million worth of shares to a number of cornerstone investors, the person said, including Walter Kwok, director of Sun Hung Kai Properties; Thomas Lau, managing director of shopping mall operator Lifestyle International Holdings; and the family of Guoco Group executive chairman Quek Leng Chan.

JPMorgan Chase, Morgan Stanley and UBS are joint bookrunners on the deal, the person said. Wynn Macau said in a prospectus that parts of the proceeds from the IPO would be used to fund its us$ 650 million expansion by adding a second casino, Encore, which is scheduled to open in the first half of 2010.

Analysts said Wynn's offering could be more attractive than Las Vegas Sands' (LVS) planned Hong Kong IPO of its Macau assets because of Wynn's lower debt levels, though the valuations of both companies are about the same.

Sands, which runs Venetian Macau, Sands Macau and Four Seasons Macau, is set to launch its us$ 1 billion Macau assets IPO later this year, with its listing hearing scheduled next week, a person familiar with the situation said earlier. Analysts said a fundamental difference in attractiveness between the two offerings was that the purpose of Wynn's IPO was to strengthen its balance sheet while the Sands' IPO was aimed at reducing its heavy debt load.

Wynn Resorts generated more than half of its us$ 723.3 million second-quarter net revenue from its Macau operations. But its Macau second-quarter revenue was down 25 % at us$ 410.4 million, as China's tightening of visa arrangements for mainland Chinese entering the former Portuguese colony affected overall turnover and winnings from its high-margin VIP segment.

However, recent data have pointed to signs of a recovery in Macau's gaming sector, with media reports suggesting that a possible easing of travel restrictions on Chinese visitors is imminent.

Macau's monthly gaming revenue in August hit a record high, up 17 % from a year earlier and up 18 % from July, according to preliminary data reported by Portuguese news agency Lusa. According to the report, Wynn had a market share of 13 % among the six operators, while Las Vegas Sands' share was around 22 %.

Other casino operators in Macau include SJM Holdings, Melco Crown Entertainment, MGM Grand Paradise and Galaxy Entertainment Group.

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