Enterprising casino managers in Macau are running a book on the name for the new Wynn casino expected on Cotai once the company generates new capital next month via a flotation of its local unit in Hong Kong.
Wynn Cotai would be the most obvious choice, but there are some other possibilities.
Wynn Resorts has raised the size of the local initial public offering (IPO) by around 25 percent, according to Reuters. As a result the company could raise up to USD1.6 billion.
The price range of the offer is expected to be from HKD8.50 to HKD10.08 per share, adds Reuters. According to Wynn’s IPO prospectus the money isn’t needed for the company’s under-construction VIP-focused property on Macau peninsula, called Encore at Wynn Macau and due to open in the first half of 2010.
The total capex for Encore Macau is estimated at USD650 million. Approximately half that has been spent so far, says the company. It adds that the cost of Encore Macau is being covered through existing cash balances and cash flow from operations.
Given Wynn Resorts’ track record for cost control in Macau, that should mean the IPO will raise enough money for a Cotai resort with plenty of change left over for operational or other purposes. A Wynn resort on Cotai will help the company compete in a sub market that is rapidly heating up, especially in the high roller segment.
Greg Hawkins, President of Melco Crown Entertainment’s (Nasdaq: MPEL) City of Dreams (CoD) told our sister publication Inside Asian Gaming recently that under the relatively level playing field created by the commission cap on VIP play, top class accommodation is increasingly becoming important in luring VIPs into a Macau property. MPEL and LVS are already going head to head and door to door for VIP customers on Cotai at CoD and The Venetian Macao respectively. A potential Wynn entry could really shake things up.
In December 2007 it was reported that Wynn had a lease or an option on a lease on a piece of land to the east of City of Dreams and almost next door to Macau International Airport.
One wag has suggested ‘Encore Une Fois’ as the name for Wynn’s new Cotai resort. The linguists among our readers tell us this translates literally as ‘again once more’ though among musicians it normally means ‘once more with feeling’.
An outside possibility for the Wynn plot of land on Cotai would be for the company to do a deal with Wynn shareholder Kazuo Okada and build an Okada Resort. As our sister publication IAG mentioned in the September edition, Mr Okada, the Japanese pachinko game manufacturer turned slot machine entrepreneur, has, via his gaming company Aruze, the largest individual stake in Wynn Resorts. (Steve and Elaine Wynn own more combined.) Mr Wynn has already honoured his business partner by naming a Japanese restaurant after the Asian entrepreneur in his Wynn Macau property. In addition, the Okada name is likely to go down well with Japanese high rollers and could be handy competition to the Cotai VIP offer from Las Vegas Sands Corp.’s Four Seasons suites and Melco Crown Entertainment’s Crown Towers at City of Dreams.
An Okada-branded resort is already scheduled to be developed at Manila Bay in the Philippines. According to media reports in the Philippines, Aruze has already put down a US$100 million deposit on the project.
Wynn announced last week that the ‘road show’ for investors in the Hong Kong Initial Public Offering (IPO) of shares in its local unit would run from 21st September, with the IPO itself expected on 9th October.
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