Tuesday, November 09, 2004
Copyright © Las Vegas Review-Journal

Wynn to complete $400 million stock offering

Money to pay for Wynn Las Vegas expansion, sources say

Las Vegas developer Steve Wynn was expected to complete the sale of a new, $400 million stock offering this morning, paving the way for a $900 million expansion of his planned Strip resort development across from Fashion Show mall, inside sources said.

Wynn Resorts executives declined to comment Monday evening because the shares were still being priced after the markets closed.

In addition to selling 7.5 million additional shares at more than $60 a share today, Wynn is expected to announce the restructuring of his bond financing, line of credit and term loans at more favorable interest rates.

Also on Monday, Wynn and the Metropolitan Police Department completed plans to implode the Palms Tower and the St. Andrews Tower of the former Desert Inn property at 2:30 a.m. on Nov. 16.

The area around the site will be closed to traffic and no public events are planned because the company wants to focus on the future rather than the past, Wynn spokeswoman Denise Randazzo said.

Two years ago, Wynn raised $450 million in an initial public offering that was originally expected to price at $21 to $23 a share, but which closed $13 a share.

The original IPO plan called for the sale of 20.45 million shares , but it was increased to 32 million share to raise the necessary money.

Wynn and Wynn Resorts Vice Chairman Kazuo Okada were forced to kick in an additional $75 million at the last minute in 2002 to get the IPO off the ground when bidding for the IPO fell short and the initial price tumbled.

Wall Street analysts who requested anonymity said Wall Street today is more receptive to IPOs, especially from the gaming industry and Wynn Resorts.

Wynn shares closed Monday at $64.19, up 18 cents a share, or 1.87 percent, on 1.2 million shares traded, 50 percent above normal trading volume.

The final 2002 casino-financing package included $365 million of second mortgage notes, backed by casino property and subordinated to first mortgage notes, that were offered shortly after the IPO with a coupon yield of 11.5 percent.

Wynn Resorts also planned to borrow about $1 billion from a financing consortium that included Deutsche Bank Securities; Bear, Stearns & Co.; Dresdner Kleinwort Wasserstein and Banc of America Securities.

The first phase, 50-story tower in Wynn Las Vegas, now in the final stages of construction, will have about 2,700 rooms. The first tower is set to open April 28, Elaine Wynn's birthday.

The new financing package, the details of which will be released later today, will cut Wynn's debt service costs and help him raise the money for the second stage of his new development

"It's all part of the future development of Wynn Las Vegas," Randazzo said.

The expansion, announced Monday, will include a 1,500-suite tower tentatively named Encore at Wynn Las Vegas that will be built on the site of the Palms and St. Andrews towers, company officials said.

In addition to the added rooms, the new tower will feature two restaurants, a spa, retail and convention space. The expansion is also expected to included expanded parking facilities, an additional showroom and 18 fairway villas adjacent to the golf course.

Wynn Resorts said plans for the new tower have not been completed but it is expected to open in 2007.