Casino's Asian IPO realizes US$1.63b
By Michael Flaherty and Sui-Lee Wee |
October 1, 2009, Thursday
|
Print Edition
Print Edition
LAS Vegas casino company Wynn Resorts has raised US$1.63 billion after pricing its Asian IPO at the top of its indicated range, a sign that demand is still strong for certain offerings despite a glut of Asian stock deals.
Wynn Macau, the fourth-largest global IPO this year, now faces the challenge of its Hong Kong trading debut, where several new listings have been battered by increasingly selective investors.
Wynn Macau sold 1.25 billion Hong Kong-listed shares at HK$10.08 (US$1.3) each, according to sources.
The IPO's range was HK$8.52-HK$10.08, with Wynn selling 25 percent of the business to the public.
But some brokers said the high price may make a strong debut more difficult for Wynn.
"The valuations are really high and market sentiment is not that good now," said Conita Hung, head of equity research for Delta Asia Financial Group.
On a 2010 enterprise value to earnings before interest, tax, depreciation and amortization ratio, 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.
The Macau gambling sector EV/EBITDA average trades at around 14.5 to 19.4 times, Chan said.
The dismal debut of Metallurgical Corp of China, a building and engineering firm, last week has weighed heavily on investor sentiment for new share offerings in Hong Kong.
Wynn's successful sale also puts pressure on arch-rival Las Vegas Sands, which plans to raise billions of dollars through a public offering in Hong Kong at the end of November or early December.
Wynn Macau, the fourth-largest global IPO this year, now faces the challenge of its Hong Kong trading debut, where several new listings have been battered by increasingly selective investors.
Wynn Macau sold 1.25 billion Hong Kong-listed shares at HK$10.08 (US$1.3) each, according to sources.
The IPO's range was HK$8.52-HK$10.08, with Wynn selling 25 percent of the business to the public.
But some brokers said the high price may make a strong debut more difficult for Wynn.
"The valuations are really high and market sentiment is not that good now," said Conita Hung, head of equity research for Delta Asia Financial Group.
On a 2010 enterprise value to earnings before interest, tax, depreciation and amortization ratio, 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.
The Macau gambling sector EV/EBITDA average trades at around 14.5 to 19.4 times, Chan said.
The dismal debut of Metallurgical Corp of China, a building and engineering firm, last week has weighed heavily on investor sentiment for new share offerings in Hong Kong.
Wynn's successful sale also puts pressure on arch-rival Las Vegas Sands, which plans to raise billions of dollars through a public offering in Hong Kong at the end of November or early December.
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