Red Rock Resorts Inc., the casino business controlled by the billionaire Fertitta brothers, opened lower in its trading debut, after pricing the shares at the midpoint of the marketed range.
Red Rock and existing shareholders raised $531.4 million in the biggest U.S. initial public offering this year, selling 27.25 million Class A shares for $19.50 apiece. It marketed the shares for $18 to $21 each.
Shares fell 3 percent to $18.85 at 11:02 a.m. in New York, valuing the company at about $2.2 billion.
Much of the proceeds will go to the Fertitta brothers, Frank, 54, and Lorenzo, 47, who serve as chief executive officer and director, respectively.
As part of the IPO, Red Rock will buy Fertitta Entertainment for $460 million minus debt, according to the offering documents. The brothers will each receive $113.5 million from the sale, while trusts for the benefit of their six children will receive a combined $106.8 million.
Deutsche Bank AG, JPMorgan Chase & Co., Bank of America Corp.’s Merrill Lynch and Goldman Sachs Group Inc. managed the IPO.