alaxy Entertainment stock rose to a record. Grand Waldo owner Get Nice Holdings surged 11 %. Galaxy advanced 5.9 % to the highest since its 1991 listing after saying it would pay us$ 419 million for Grand Waldo which includes a spa, casino and a 29,728 sqm hotel. The casino inside the hotel is already run by Galaxy, which holds one of Macau’s six gambling licenses.
The reclaimed land that joins the Cotai and Taipa islands in the former Portuguese colony is being built into Asia’s equivalent of the Las Vegas Strip. Casino operators from Sands China to Melco Crown Entertainment are adding shopping malls, spas and shows to their resorts, competing for casino revenue that Deutsche Bank AG estimated will grow to 44.5 billion this year after the record us$ 38 billion last year.
“The deal will help broaden Galaxy’s portfolio as Galaxy Macau resort on Cotai appeals to the premium mass while Grand Waldo can draw the lower end mass market gamblers,” Grant Govertsen, an analyst at Union Gaming Research, said by phone today. The company’s StarWorld on the Macau peninsula focuses on the high-stakes gamblers, he said.
Galaxy Entertainment said the acquisition “is a strategic investment and is expected to have synergistic effect” on the group’s development in Cotai. Grand Waldo is “strategically located” and it will complement existing Galaxy properties, according to Peter Caveny, VP of investor relations at Galaxy Entertainment. The property is located next to the Galaxy Macau resort. Galaxy expects the deal to be completed in the third quarter this year, said Caveny.
Founded by billionaire Lui Che-Woo, Galaxy has received approval from the government to add 50 tables this year, Deputy Chairman Francis Lui said in March. The company plans to invest as much as us$ 6.44 billion to expand the third phase of Galaxy Macau.
Sands China, the Macau casino controlled by billionaire Sheldon Adelson, received approval in January to add 200 additional gambling tables. Its latest resort, Sands Cotai Central, was opened in April last year. Sands is investing us$ 2.8 billion in the world’s largest gambling hub to build its fifth on Cotai.
Hong Kong-based Galaxy in March reported annual profit that more than doubled to us$ 953.7 million from us$ 386.6 million a year earlier.
Casino revenue in Macau, the only place in China where casino gambling is legal, is expected to exceed us$ 100 billion by 2020, according to estimates by CLSA.