Nov. 23 (Bloomberg) -- Sands China Ltd. and its parent, the casino company controlled by billionaire Sheldon Adelson, raised HK$19.4 billion ($2.5 billion) in a Hong Kong initial public offering conducted at the bottom of the marketed range.

The Macau casino operator and parent Las Vegas Sands Corp. sold 1.87 billion shares, a 23.2 percent stake, at HK$10.38 each, according to Bloomberg data. The sale, at the lowest of a HK$10.38 to HK$13.88 price range, values Sands China at HK$83.5 billion, based on Bloomberg calculations using information from the prospectus.

The price is “not too bad given the sector is not that hot right now,” Billy Ng, a Hong Kong-based analyst at JPMorgan Chase & Co., said today. “Gaming revenue numbers are still strong, but sentiment has changed as China hasn’t eased travel curbs” on mainland residents’ visits to Macau, he said.

Sands China’s share of the proceeds, together with $1.75 billion in bank financing, will help it resume construction of a 13.3 million square foot casino-resort. Adelson, Las Vegas Sands’ 76-year-old chairman, is betting that more convention space, hotel beds and shopping malls will entice visitors to stay longer and boost Macau’s non-gambling revenue.

Adelson’s Challenge

Project completion will strengthen Adelson’s challenge to 87-year-old Stanley Ho, who controls SJM Holdings Ltd., the biggest casino operator by market share in Macau, the world’s largest gambling hub. Sands’ project was halted in November 2008 after credit markets seized up and revenue dwindled.

Sands China’s IPO gives it an enterprise value of 13.5 times next year’s earnings before interest, tax, depreciation and amortization, according to a person familiar with the sale. Wynn Macau Ltd. was valued at 14.5 times on the same basis when it sold shares in October.

Enterprise value measures stock market capitalization plus preferred equity and interest-bearing debt, minus cash and equivalents.

Wynn Macau fell 1 percent to HK$9.30 at 11 a.m. in Hong Kong trading. That’s 14 percent lower than its Oct. 9 debut closing price and 8.3 percent below its IPO price.

Sands China’s shares are expected to start trading in Hong Kong on Nov. 30, its prospectus said.

Las Vegas Sands has surged 176 percent this year, after dropping 94 percent in 2008. The stock fell 3.5 percent to $16.35 on Nov. 20.

Asia’s Liquidity

“This IPO demonstrates that Asia has the liquidity available for U.S. firms looking to develop leisure assets,” independent industry strategist Jonathan Galaviz said Nov. 21. “A bet on Macau is a bet on the greater Asian economic story, so if you believe in Asia you’ve got to believe in Macau.”

China curbed travel last year. Residents of Guangdong, one of the richest provinces, were limited to one visit every two months, a policy that hasn’t changed, the province’s exit and entry administration said last month.

Stephen Wynn, billionaire chairman of Wynn Resorts Ltd., said Sept. 23 that China had eased the restrictions to one visit a month.

Sands China will open most of its stalled resort in Macau by December 2011, Michael Leven, chief operating officer of the parent, said Nov. 15. The project, on what is known as sites 5 and 6 on the Cotai Strip opposite its flagship Venetian Macao, would add 6,000 rooms to the 3,554 Sands had in the city as of June 30, according to its prospectus.

Macau, a former Portuguese colony, is the only place in China where casinos are legal. More than half of the city’s visitors come from China, the world’s most-populous country.

Hong Kong IPOs

Sands China may restart construction as early as January, Steve Jacobs, chief executive of Sands China, said in an earlier briefing. Sands spokesman Ron Reese declined to comment on the IPO pricing.

The share sale will add to the busiest period for Hong Kong IPOs in almost two years as investors captivated by China, the only economy among the world’s 10 largest that’s projected to grow this year, seek to tap into the biggest overseas market for mainland companies.

Sands China’s sale, the 16th IPO on the city’s exchange since Oct. 1, raises to HK$80.9 billion the tally of funds raised so far this quarter, the most since the final three months of 2007, according to data compiled by Bloomberg. The 33 initial share sales in the first nine months of 2009 raised a combined HK$102.5 billion, the data show.

Casino revenue in Macau may rise to a record this year, Portuguese news agency Lusa reported earlier this month, boosted by unprecedented lending and an economic recovery in China.

Macau’s gambling revenue may grow 10 percent next year, Kenneth Fong, an analyst at Nomura International Hong Kong, said earlier this month.

To contact the reporters on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.netSarah McDonald in Sydney at smcdonald23@bloomberg.net

Last Updated: November 22, 2009 22:41 EST