The Mother of All “Macau Casino IPOs”

Posted: July 25, 2009 in Uncategorized

Sands IPO  in Hong Kong  –  Interesting Observation 

Analysed by:  expert IR      (25th July 2009)   Bag of Cash

This is an extract (of Wynn-LVS IPO Race Is On) from Destination Macau’s E-news:

The real question, however, is what offer does Adelson have on the table – or tables – in Beijing? We know a few things for sure. One, he has a very influential partner in Lot 3, David Chu of the Far Eastern Group, who has an interest in seeing the Cotai Strip become a reality. Two, the Macau and Chinese governments would be very happy if Lot 5 & 6 was restarted and tens of thousands of jobs came back online. And three, having a Chinese equity partner would make Adelson’sambitions both more manageable and more realistic in Macau.

 

Expert IRWhat Expert IR says,

While I am very much respectful of Destination Macau’s view about this Wynn-LVS IPO and to be frank, most of Destination Macau’s articles are really interesting to read.  Still, I must say that,

–  On the issue of casinos’ social impact vis-a-vis long-term economic development impact on Macau SAR and the larger Guangdong province, nobody has much influence over the minds of the Central Government in Beijing.  We don’t think that this gentleman David Chu has any cards in hands.

–  About Mr. Adelson’s recent trip to Beijing.  We have feedback from Chinese side too.  In fact, Las Vegas Sands has been playing tough stance with Beijing for a long while, since the early days of Sands investment in Macau.  It was quoted among the Chinese inner circle: “So can the Americans bring away their buildings from Macau? Even they kept threatening that they might pull out.”  Another famous quote: “We can provide some blood transfusion to Macau like what we did for Hong Kong, but don’t expect us (Beijing) to chop off the whole arm for them!”. So, the dream of Macau’s gaming pie would grow in unlimited flow must be checked with reality.  The new CE successor would know the ultimate policy very well.  The analogy of a water-tap (open a bit & close) should be the reality.  By the way, the Tap is in Beijing !

–  We don’t think that why on earth the Chinese government will be very happy if Lot 5 & 6 would be restarted.  Look, that’s not the key consideration for the Central government just to fill job vacancy of a couple of thousands labour workers from mainland China.  Deeper implications of allowing Macau to continue its casino related growth (building hotels but add on more casino floors within)  had been studied by Beijing. 

–  Beijing doesn’t need to manage Adelson’s ambition at this juncture.  What ambition?  At a time when LVS’s balance sheet remains quite imbalance.

–  Yes, another interesting factor, we remember that Adelson is not a Democrats supporter though.

Anyway, is good that there should be hope in life (for Macau’s casinos pie as well), because that’s what moves the stock markets…   

 

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