HONG KONG: Wynn Macau Ltd, the casino company led by billionaire Stephen Wynn, raised HK$12.6 billion ($1.63 billion) in a Hong Kong initial public offering, said two people familiar with the matter.

Wynn Macau sold 1.25 billion shares, a 25 percent stake, at HK$10.08 each, said the people, declining to be identified before a public announcement. The IPO values the business at 14.5 times next year's earnings before interest, tax, depreciation and amortization as estimated by banks involved in the sale, one of the people said.

Stephen Wynn, 67, is selling assets in Macao, the world's biggest gambling hub, as he grapples with falling revenue at Wynn Resorts Ltd's Las Vegas operations. The sale values Wynn Macau shares higher than those of rivals, including SJM Holdings Ltd and Galaxy Entertainment Group Ltd, according to data compiled by Bloomberg.

"Wynn Macau deserves a premium because of its brand," said Sean Monaghan, a Singapore-based investment consultant. "It's like buying a Ferrari, they're always expensive."

Macao casino operators traded in Hong Kong have surged this year on optimism that the mainland will make it easier for its citizens to travel to Macao, the only Chinese territory where casinos are legal.

The government has increased the frequency with which residents of the southern Guangdong province can visit Macau, to once a month from once every three months, Wynn told reporters on September 23.

At more than 30 times estimated 2009 profit, Wynn Macau shares are the "most expensive" among Hong Kong-traded casino companies, said Kenny Tang, an executive director at Redford Securities Co. Tang said he prefers SJM, which trades at 22 times earnings.

Wynn Macau may fall when it starts trading Oct. 9 as investors get less bullish on the outlook for equity markets, Tang said. "Sentiment isn't very good. A lot of the IPO shares have dropped below their prices," he said.

Bloomberg News

(HK Edition 10/01/2009 page3)