Macau Legend Falls on $174 Million Stock Sale

(Corrects headline, first and second paragraph to show stock fell.)

Macau Legend Development Ltd. (1680), the casino company that cut its initial public offering size in June, dropped after saying it raised about HK$1.35 billion ($174 million) selling new shares, less than previously planned.

Macau Legend fell 1.5 percent to close at HK$7.74 in Hong Kong trading. The benchmark Hang Seng Index advanced 0.6 percent.

The company sold shares equal to about 2.9 percent of its enlarged share capital at HK$7.25 each to fund its proposed redevelopment of Fisherman’s Wharf casino complex in Macau, it said in a Hong Kong stock exchange filing yesterday. The $174 million is about 58 percent of the $300 million Co-Chairman Carl Tong said in September the company planned to generate selling new shares.

Macau Legend, which is controlled and run by Chairman and Chief Executive Officer David Chow, a former Macau lawmaker, doesn’t have a casino license of its own. Its key assets include the Landmark Macau hotel, the Pharaoh’s Palace casino and the Fisherman’s Wharf complex.

Downsized IPO

Macau Legend, which operates casinos under the license of casino mogul Stanley Ho’s SJM Holdings Ltd. (880), raised HK$2.19 billion in its initial public offering. It had initially intended to raise HK$4.4 billion and use most of the funds for the redevelopment of the Fisherman’s Wharf complex.

Fisherman’s Wharf will focus more on mass-market gamblers instead of high-stakes bettors, Tong said in September. The company will have a total of 500 gaming tables at Fisherman’s Wharf by 2016 after its revamp.

In the share placement, referred to as a top-up sale, Chow’s All Landmark Properties Ltd. sold existing stock at HK$7.25 a share, representing a 7.8 percent discount to the closing price of HK$7.86 on Jan. 16, and will subscribe for an equal number of new shares at the same price.

Dynam Hong Kong Co., a unit of Dynam Japan Holdings Co. Ltd. (6889), the cornerstone investor in Macau Legend’s IPO, will also subscribe new shares, the company said. Citic Securities Co. unit CLSA Ltd. and Credit Suisse Group AG are placing agents for the share sale, Macau Legend said.

Galaxy, Sands China

The company is in talks with ICBC Macau to seek up to HK$4 billion in a five-year term loan to refinance its existing debts, according to the same statement.

Casino revenue in Macau, the world’s biggest gambling hub, rose 19 percent to 360.7 billion patacas ($45.2 billion) last year, about seven times that of Las Vegas Strip.

Galaxy Entertainment Group Ltd., the Macau casino company that made Chairman Lui Che-woo the richest person in Asia, jumped 5.3 percent to HK$83.20 in Hong Kong. Sands China Ltd. rose 3.5 percent to HK$64.95 and Melco Crown Entertainment Ltd. (6883) climbed 4 percent to HK$120.10.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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