Casino, leisure and hospitality operator Macau Legend has held its significantly downsized public offering on the Hong Kong Stock Exchange, raising a reported HK$2.2 billion.
The Wall Street Journal says 934.8 million shares were sold at a price per unit of HK$2.35, which is near the bottom of the offering’s expected range of $2.30-$2.98.
The sale, equivalent to US$282 million, works out to only 36% of the HK$6 billion-plus (US$770 million) the company targeted in a filing last month as it apparently was swept up in global fears of a credit crunch in China which have battered Asia listings the last couple of weeks, among them Macau’s leading casino operators. The company had delayed the offering at first, hoping not to have to lower it by more than half.
Macau Legend owns the Fisherman’s Wharf entertainment complex on Macau’s Outer Harbour and operates two casinos and a hotel in the city. The bulk of the offering’s proceeds initially were earmarked for a refurbishment and expansion of Fisherman’s Wharf with the addition of three tourist hotels, one of which calls for a 117-table casino. The complex already contains a casino, the Babylon, with 23 public tables and an undisclosed number of VIP tables. The company also operates the Pharaoh’s Palace Casino at the Landmark Hotel downtown, with 123 table games, and says it wants to increase table inventory across all its properties from 147 to 500.
Pharoah’s Palace and Babylon are run as third-party-promoted “satellites” under the casino concession of HK-listed operator SJM Holdings. SJM has fee-based or revenue-sharing service agreements with outside operators at 17 casinos around the city. Macau Legend is partly owned by SJM, and SJM and members of the family of its founder, Stanley Ho, reportedly have bought into the IPO. Japanese pachinko operator Dynam Japan is also reported to be a major investor. Dynam is interested in pursuing a casino license in Japan if the government there decides, as expected, to legalize the industry in the next couple of years.
The stock is due to be listed on the HKSE this Friday.
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