HONG KONG: Las Vegas-based Wynn Resorts Ltd, the first foreign casino operator to be listed in Hong Kong, plans to raise as much as HK$12.6 billion ($1.63 billion) in a Hong Kong initial public offering of its Macao casino assets, two people familiar with the matter said.

Wynn Macao Ltd plans to sell 1.25 billion shares for between HK$8.52 and HK$10.08 apiece, the two sources said, asking not to be identified before a company announcement. The sale represents about 25 percent of the Macao business, they said.

The US casino operator is selling part of its Macao assets, which contributed 57 percent to second-quarter revenue, as it grapples with declining income at home. Wynn is tapping optimism that Beijing will later this year make it easier for mainland residents to travel to Macao, the world's biggest gambling hub, after a rally that has seen Hong Kong shares of Macao casino operators Galaxy Entertainment Group Ltd, SJM Holdings Ltd and Melco International Development Ltd more than double this year.

"Macao 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, which oversaw $4 billion as of April. "There are still a lot of unknowns regarding the supply of gaming tables" and the government's visa policy, he said.

JPMorgan Chase & Co, Morgan Stanley and UBS AG, hired as global coordinators of the sale, began offering the stock to investors yesterday. The price is expected to be fixed on October 1, with trading under the listing identifier "1128" to debut on October 9, according to a preliminary prospectus. The target size of the sale was earlier reported at about $1 billion.

Bank of America Merrill Lynch and Deutsche Bank AG are also joint bookrunners of the share sale.

Global investors are likely to be drawn to the IPO, as it's the first foreign casino operator to be listed in Hong Kong, said Steven Leung, an institutional trader at UOB-Kay Hian Ltd.

Six cornerstone investors have pledged to buy up to $250 million of the shares, the draft prospectus said. These include Malaysian billionaire Quek Leng Chan, who controls Hong Leong Co, agreeing to buy $80 million.

Walter Kwok, who last year was ousted as chairman of Hong Kong developer Sun Hung Kai Properties Ltd, agreed to buy $20 million, while Thomas Lau, brother of Hong Kong billionaire Joseph Lau, will buy $50 million, the document said. CMY Capital Markets Sdn Bhd, a Malaysian company controlled by Chua Ma Yu, will buy $70 million, it said.

Earnings at Wynn Resorts, founded by Stephen Wynn, have fallen for the past two years as a global economic slowdown hurt travel and spending at the company's Las Vegas casinos and hotels. In contrast, net income at Wynn's Macao operations rose 48 percent to HK$2.04 billion last year, the draft prospectus said.

Bloomberg News

(HK Edition 09/22/2009 page3)