Wynn Resorts' Hong Kong IPO Draws Near

LAS VEGAS-Wynn Resorts on Friday advanced plans for the listing of its Macau operations on the Hong Kong Stock Exchange by filing a required disclosure statement detailing its Asian operations. Wynn recently received approval from Hong Kong Stock Exchange regulators for an initial public stock offering of a 20% stake that would generate proceeds of up to $1 billion, according to multiple reports. The shares are expected to begin trading in early October after a three-week marketing campaign.

Macau, a special administrative region of China, is the only place in the county where gambling is legal. The gambling industry there started in 1962 when the government issued a single license to Stanley Ho. The monopoly ended in 2002 and several licenses were handed out. By the time Wynn Macau opened in 2006, the market has surpassed Las Vegas as the world’s largest gaming market.

Las Vegas Sands Corp., which operates two casinos in Macau, last week completed the sale of $600 million in bonds in advance of its expected initial public offering of operations there on the Hong Kong Stock Exchange. It filed its application for the listing last month, shortly after negotiating a deal with Bank of Nova Scotia whereby it is now allowed to sell as much as a 49.9% stake in its Macau operations–as long as a healthy chunk of the net proceeds are used to pay down its subsidiaries’ $3.3-billion credit facility with the bank.Wynn’s disclosure statement detailed its existing resort there, Wynn Macau, the adjacent one under construction, Encore at Wynn Las Vegas, and its plans for a 52-acre development in Cotai. “We believe our brand name and high quality offerings, focus on service and attention to detail allow us to more effectively penetrate the premium segments of the gaming market than other operators,” it states.

Indeed. Wynn’s market share of table revenues in Macau in 2008 was 16.4% while its market share of actual table games was 8.9%. Its net win per gaming table in 2008 was HK$118,968.7, nearly double the daily gross win per gaming table in the overall Macau market. In addition, its average daily slot win of HK$2,661.8 in 2008 was more than double the overall Macau market average.

Wynn Macau’s total operating revenues in 2008 were HK$14.7 billion and its profit was HK$2.04 billion. Through the first half of 2009, its total operating revenues were HK$6.7 billion and its profit was HK$903.7 million.

The following is a listing of other salient facts detailed in the disclosure statement: