Wynn to Las Vegas Sands: Top This

By Robert Steyer | More Articles
October 1, 2009 | Comments (2)

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Steve Wynn and Sheldon Adelson have had many duels over the years, ranging from strategic disagreements about entering the Chinese gambling enclave of Macau to arguing over the heights of Las Vegas casino resorts.

So, let's add initial public offerings in Hong Kong to the history between the chairman and CEO of Wynn Resorts (Nasdaq: WYNN ) and the chairman and CEO of Las Vegas Sands (NYSE: LVS ) .

Steve Wynn got out of the gate first on Wednesday with an IPO on the Hong Kong Stock Exchange worth the equivalent of US$1.6 billion, representing 25% of his company's Macau subsidiary. The deal is expected to close Oct. 9. The offering price, equivalent to US$1.30 per share, was at the top of the range proposed by underwriters.

Anything you can do, I can do bigger
Wynn Resorts has one Macau casino/resort, and it expects to open an expansion -- Wynn Encore -- during the first half of 2010. Although the company wants more land in Macau, it hasn't yet received government approval.

Adelson has been more aggressive in Macau, with two casino/hotel resorts and another luxury hotel. However, Las Vegas Sands has had to delay several projects "due to difficulties in the capital markets and the overall decline in general economic conditions." It must secure additional financing to complete these projects.

Las Vegas Sands hasn't provided details on how much it wants to raise in a Hong Kong IPO. In early September, it completed a bond deal with a Citigroup (NYSE: C ) unit for US$600 million in anticipation of a listing on the Hong Kong Stock Exchange. The bonds are exchangeable for stock if and when the IPO is completed.

Is good news sustainable?
There's been some encouraging signs from Macau recently, including favorable gambling-revenue reports for July and August, which should buck up not only Wynn Resorts and Las Vegas Sands, but also MGM Mirage (NYSE: MGM ) and Melco Crown Entertainment (Nasdaq: MPEL ) . Late last month, Steve Wynn told reporters that China had eased travel restrictions into Macau, but he didn't provide a source or many details.

Steve Wynn occupied the headlines then, but the future spotlight belongs to Adelson. With a Hong Kong IPO expected this year, the continued uncertainty about Macau construction, the recent opening of a casino in Bethlehem, Pa., and the anticipated opening of a Singapore casino in the first quarter of 2010, Adelson won't be starving for attention. Investors hope he won't be starving for financing.

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Fool contributor Robert Steyer doesn't own shares of any companies cited in this story. Melco Crown Entertainment is a Motley Fool Global Gains pick. The Fool has a disclosure policy.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On October 01, 2009, at 4:40 PM, spokanimal wrote:

Help for Mr. Steyer:
> Wynn has the Cotai property. Govt. approval is a
formality. Before casting any doubt about that in the
language you use, you should look at the process as it
was applied for Melco (city of dreams) and Galaxy
(Cotai megaresort) so that you won't mislead your
readers.
> Thank you for the "encouraging" report on Macau
revenues. The proper word, considering the magnitude
of the revenue surge is "exciting", or, maybe "powerful".
You missed a month as well as the September
revenues in the SAR were up 53% year-over-year...
so, is that "encouraging" or, maybe "incredible" would
be more like it.
Spokanimal
Report this Comment On October 01, 2009, at 5:27 PM, Antidogma wrote:

Cramer and the Fools have bad-mouthed LVS since it tanked at $1.38 when I noticed it. Against their advice, I bought about 2700 shares averaging about $3.30. All the way up I almost dumped LVS due to the constant bad rap from Cramer and Fools. For once my stubborness paid off. I felt the profit was enough and because MGM's 7,000 rooms were opening soon on the strip, I cashed out at $19. I did learn that I can't take Cramer or Fools seriously concerning my investments. LVS should again excell down the road. GWD

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