UPDATE 1-Wynn Macau prices HK IPO at top of range - sources

Published 09/30/2009, 12:29 AM
Updated 09/30/2009, 12:33 AM
UPDATE 1-Wynn Macau prices HK IPO at top of range - sources

* Wynn Macau prices IPO at HK$10.08/share -sources

* Company raises $1.63 billion, top 5 global IPO for 2009

* Successful deal puts pressure on Sands upcoming HK IPO (Adds details, background)

HONG KONG, Sept 30 (Reuters) - Las Vegas casino company Wynn Resorts priced its Asian IPO at the top of its indicated range, a sign that demand is still strong for certain offerings despite a glut of stock deals in and around Hong Kong.

Wynn Macau sold 1.25 billion shares Hong Kong-listed shares at HK$10.08 each to raise $1.63 billion, according to sources, who had direct knowledge of the deal but were not authorised to speak publicly about it.

The IPO's range was HK$8.52-HK$10.08, with Wynn selling 25 percent of the business to the public -- up from earlier plans to sell 20 percent. The offer has a greenshoe option to sell about 250 million further shares, subject to demand.

By pricing at the top end, the Wynn Macau sale is among the top five global IPOs this year. The Wynn Macau offer is especially important given the deal's potential impact on the company's flagship Las Vegas operations. Wynn is hoping that a high valuation through the Hong Kong listing will boost valuations at its other divisions.

On a 2010 enterprise value to earnings before interest, tax, depreciation and amortisation ratio (EV/EBITDA), Wynn Macau trades around 16 times, much higher than Macau gambling tycoon Stanley Ho's flagship casino firm SJM Holdings' 7.5 times, according to Credit Suisse analyst Gabriel Chan.

JPMorgan, Morgan Stanley and UBS AG are joint sponsors and global coordinators of the deal, with BofA-Merrill Lynch and Deutsche Bank as joint bookrunners.

U.S. casino operators, grappling with high debt levels and a recovering economy, are hoping to boost valuations through spinoffs in China's gambling hub, Macau, the former Portuguese colony located an hour away from Hong Kong by ferry.

Macau now hosts the world's biggest gambling market, which raked in record bets in August..

Wynn rival Las Vegas Sands also plans to raise billions of dollars through a public offering in Hong Kong. Wynn's successful pricing now puts pressure on Las Vegas Sands to deliver a successful deal, amid increased pressure on new listings in the Hong Kong and Chinese markets.

Wynn Macau attracted a combined $250 million from several so-called "cornerstone investors," or investors who take a substantial stake in the company before the offering, one of the sources said.

Among them is Thomas Lau, the billionaire managing director of Lifestyle International, the retailer that operates the Sogo department stores in Hong Kong's Causeway Bay and Tsim Sha Tsui districts and the Jiuguang Department Store in Shanghai. Another is Walter Kwok, of the Kwok family-run Sun Hung Kai Properties, Asia's largest property group by market value. Malaysia's wealthy Guoco family is also investing in the IPO. ($1=7.749 Hong Kong Dollar) (Reporting by Michael Flaherty; Editing by Lincoln Feast)

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