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Friday, July 11, 2008

‘Wynn Resorts may raise US$3b in HK share sale’

HONG KONG: US casino giant Wynn Resorts Ltd is considering a Hong Kong share sale to raise as much as US$3 billion (US$1 = RM3.24) to help fund the firm’s planned mega resort in the former Portuguese enclave of Macau, a newspaper reported yesterday.

UBS, Morgan Stanley and Deutsche Bank have been hired to handle the transaction, the South China Morning Post cited sources as saying.

But the sources warned that volatile markets, racked by uncertainties over the US economy, may put off the listing in the near future.

“At the moment, the market is definitely not right,” the newspaper quoted a source as saying.

The report said Wynn’s current plans to open a 400-room hotel tower called Encore, next to its existing property, did not need new financing.

Instead, it could use any cash raised from a share sale to build a resort on the Cotai Strip, a huge piece of reclaimed land close to Las Vegas Sands’ huge Venetian Casino, which opened last August.

IPOs are suffering in general this year amid financial market turmoil, and Macau-related stocks are hurting even more because intense competition has shaved casino profits.

Casinos across the US, including those run by Wynn and Las Vegas Sands, have become less of a draw to consumers, who have been hit by economic uncertainty, a declining housing market and soaring gas prices.

Wynn’s US-listed shares have lost more than 30 per cent this year.

In Hong Kong, billionaire Stanley Ho’s Sociedade de Jogos de Macau (SJM) raised US$494 million in July by pricing its shares at HK$3.08 (HK$100 = RM41.57) apiece, at the low end of an indicated range in a deal handled by Deutsche Bank.

The firm had hoped to raise US$1 billion in an offering in January, but shelved the plan amid a weak stock market and queries made by Hong Kong’s Securities and Futures Commission regarding the shareholding structure of SJM’s parent firm, STDM.

On Wednesday, SJM delayed its Hong Kong IPO by a week to July 16.

Since Ho’s monopoly on gaming in the former Portuguese colony was broken up in 2002, the city has seen a flood of investment from foreign operators, transforming it into a gleaming gambling paradise.

By Agencies

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