Wynn Stock Soars on Sale of Macau License

Steve Wynn’s gamble on the Chinese enclave of Macau is paying. Shares in his casino company shot up 12% on Monday after he announced a $900-million sale of casino rights to Australian firm Publishing & Broadcasting.

The price of the gambling license, the last one available in Macau until 2009, far overshot analyst expectations and would go a long way toward financing the $1.2-billion Wynn Macau resort set to open Sept. 5, analysts said.

Shares in Wynn Resorts Ltd. jumped $7.83 to $72.24.

“We are stunned by the $900-million number,” Prudential Equity Group analyst William Lerner wrote in a research note. Lerner said he had expected a price of $350 million to $500 million.

The deal allows the Australian company to own and operate hotel casino resorts in Macau. Analyst Steven Wieczynski of Stifel, Nicolaus Capital Markets said the sale would allow Wynn Resorts to remove a huge chunk of debt from its balance sheet.

“He’s basically getting a casino in Macau for free,” Wieczynski said.

Macau, which reverted to Chinese rule in 1999, became known as Asia’s Las Vegas after authorities lifted a decades-old casino monopoly held by mogul Stanley Ho in 2002. The government has granted a limited number of gambling concessions, including licensing two other U.S.-based companies, MGM Mirage Inc. and Las Vegas Sands Corp.

The former Portuguese colony’s proximity to billions of potential Hong Kong and mainland Chinese gamblers has made it a Wall Street darling.

MGM shares rose $1.32, or 3.5%, to $39.51 and Las Vegas Sands surged $3.18, or 5.9%, to $56.63.

The sale does not affect Wynn’s plans to open casinos of its own in Macau, but prevents Las Vegas rival Harrah’s Entertainment Inc., the world’s largest casino operator, from breaking into the Macau gambling market any time soon without a partner.

Harrah’s shares edged up 41 cents to $71.64.