* Wynn Macau IPO several times covered - sources
* Institutional portion is more than 10 times
* Hong Kong IPO markets show signs of weakening
* Peak Sport falls 17 pct in Tuesday debut
By Michael Flaherty
HONG KONG, Sept 29 Days before the highly
anticipated pricing for Wynn Macau's $1.6 billion public
offering, Hong Kong's soaring IPO market is sputtering, with
sportswear company Peak Sport (1968.HK) the latest weak debut.
Sources said the Wynn Macau deal, a spin-off of the Asian
assets of U.S. casino operator Wynn Resorts (WYNN.O), is
several times covered, with one source saying the institutional
portion was more than 10 times over-subscribed.
The public listing looks to have solid demand before its
scheduled pricing on Thursday, though sources also cautioned
that the books just closed and pricing is still a day or two
The sources had direct knowledge of the IPO but were not
authorised to speak publicly about it.
If priced at the top of the price range of HK$8.52 to
HK$10.08 per share, Wynn Macau will raise HK$12.6 billion
($1.63 billion) in the fourth largest global IPO this year.
Interest in Wynn Macau offer is especially high given the
deal's potential impact on the company's flagship Las Vegas
operations. Wynn is hoping that a high valuation through the
Macau listing here will boost valuations at its other
But the red hot Hong Kong IPO market, which ripped out
several billion-dollar offerings that met with heavy demand and
strong debuts, is showing signs of cooling.
Investors, which are seeing roughly $15 billion worth of
IPOs hit the Hong Kong market over a three-month span, appear
to be getting more selective.
"There are too many deals coming out at the same time,"
said Andrew Mantel, managing director of Pacific Sun Investment
Management. "There's only so much to go around."
Mantel, who went to the Wynn Macau investor luncheon but
would not say whether the fund has committed money to the deal,
said first mover advantage was important for Wynn.
"Companies are scrambling to raise money," he said. "For
Wynn, it's important to tap the market before other casino
Rival Las Vegas Sands (LVS.N) is aiming to raise $1
billion to $2 billion through the sale of a minority stake in
its Macau operations at the end of November or early December.
RECENT ISSUES STRUGGLE
Several recent issue have struggled.
Peak Sport Products (1968.HK) became the latest victim of
cooling investor enthusiasm for Hong Kong offerings when its
shares ended down 17 percent from their IPO price on Tuesday.
That weak showing followed a 13 percent fall late last week
for Hong Kong-listed shares of Metallurgical Corp of China
(601618.SS)(1618.HK), a building and engineering firm that
raised $2.3 billion in Hong Kong's largest IPO so far this
Despite the strong interest in Wynn Macau, the offering may
not price at the actual top of its range due to lacklustre
trading debuts in recent days for other major offerings.
JPMorgan (JPM.N), Morgan Stanley (MS.N) and UBS AG
UBSN.VX are joint sponsors and global coordinators of the
deal, with BofA-Merrill Lynch and Deutsche Bank (DBKGn.DE) as
The Wynn IPO comes on the back of record monthly gaming
revenues in Macau in August, and news that China has quietly
eased restrictions on its citizens travelling from Guangdong
province to Macau, signaling a faster-than-expected recovery in
the world's largest gaming market. [ID:nHKG158012]
(Additional reporting by Doug Young and Shankar Ramakrishnan;
Editing by Lincoln Feast)