Macau Legend Said to Plan $800 Million IPO in Hong Kong

Macau Legend Development Ltd., the casino operator backed by former Macau lawmaker David Chow, may seek as much as $800 million in an initial public offering in Hong Kong, a person with knowledge of the matter said.

The share sale may start as early as in the second quarter, said the person, asking not to be identified because the information is private. Key assets of the company include the Landmark Macau hotel, the Pharaoh’s Palace casino and the Macau Fisherman’s Wharf complex.

CLSA Ltd. will help arrange the IPO, the person said. A spokeswoman for Macau Legend declined to comment on the share sale plan. The Apple Daily reported on the IPO yesterday, citing unidentified people.

Casino revenue surged 20 percent last month to a record 28.2 billion patacas ($3.5 billion) in the former Portuguese colony, according to data compiled by Bloomberg. Sands China Ltd., the Hong Kong-listed unit of billionaire Sheldon Adelson’s Las Vegas company, soared 61 percent in the past 12 months, while SJM Holdings Ltd. gained 45 percent.

Sands China is trading at about 30 times estimated earnings for the coming 12 months, while SJM is at 16 times, according to data compiled by Bloomberg.

Macau Legend’s Fisherman’s Wharf is an entertainment complex that includes restaurants and a theme park. While the company has some casino operations, it doesn’t have its own license.

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The new IPO “may not be able to command a very high valuation because it’s being seen more as an entertainment company running a theme park than a casino operator,” Lantis Li, a Hong Kong-based analyst at Capital Securities Corp. said by phone today. “Macau Legend doesn’t own any casino license. It runs the casinos through SJM’s license.”

SJM is one of just six operators in Macau that have government permission to operate their own casinos. It runs some casinos in partnership with companies that don’t have their own licenses.

Chow served as a legislator in Macau from 2005 to 2009.

Macau casino operators are investing in hotels and entertainment centers to draw more middle-class tourists from China’s mainland.

Visitor arrivals in Macau rose 0.5 percent to 25.6 million in the first 11 months of 2012, with 60 percent coming from mainland China, the city’s Statistics and Census Service has said.

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