A Las Vegas casino company and a Chinese bank have set the price range for their upcoming Hong Kong stock offerings, hoping to raise up to $7.35 billion combined in what would be the world's fourth- and fifth-largest IPOs of the year.
Gaming group Las Vegas Sands seeks up to $3.35 billion through an initial public offering of shares in its Macau business, sources with direct knowledge of the IPO said on Sunday.
The top-end of the range is higher than the roughly $2.5 billion the market had been expecting and comes on the same day that news appeared of China Minsheng Banking Corp's own IPO price range.
China Minsheng Banking Corp, the country's seventh-largest bank, plans to raise as much as $4.07 billion in its November Hong Kong listing, according to a term sheet obtained by Reuters on Sunday. Minsheng, which is already listed in Shanghai, was the first listed non-state lender in China, and has never received government support in terms of carving out bad assets.
The two listings are hitting the Hong Kong IPO market at a delicate time. Money flows into this high-growth region, combined with a strong economy and a red-hot stock market, have led to a surge of equity offerings. Despite an IPO market that seems crowded, the pipeline of equity deals remains long and contains several other multibillion-dollar listings.
But investors across the region are showing signs of fatigue in the listings, particularly in over-represented sectors such as Chinese property companies. And it's not just Hong Kong and China's famously aggressive retail investors who are tiring on the IPOs.
Still, the ranges given for Sands and Mingsheng suggest that demand remains strong.
Sands is selling 1.87 billion shares at a price ranging from HK$10.38 to HK$13.88 per share, the sources said. The range gives a price multiple of 13.5 to 16.5 times the business's 2010 projected earnings, the sources said.
All sources that Reuters spoke to on Sunday did not want to be named because they were not authorized to speak publicly about the deals. The companies could not immediately be reached for comment.
Minsheng, which will kick off a formal marketing roadshow on Monday, is offering 3.32 billion shares, or 15 percent of its enlarged share capital.
Minsheng's IPO move came after the Beijing-based lender failed to launch its Hong Kong IPO at least twice in the past few years due mainly to unfavorable market conditions. At a proposed price range of between HK$8.50 and HK$9.50 per share, Minsheng Bank is valued at 1.67 to 1.8 times 2010 book value -- after certain deal considerations -- estimated by joint bookrunners, a source close to the deal said. By comparison, its peer Bank of Communications, China's No. 5 lender, trades at about 2.17 times 2010 book value, while China Merchant Bank and CITIC Bank trade at 2.75 times book and 1.66 times book value, respectively, according to a UBS research report.
Nevada-based Las Vegas Sands, operator of the Venetian Resort in Las Vegas, is seeking to list its Macau division on the Hong Kong Stock Exchange to boost the value of it's overall business. The gaming and casino company run by Sheldon Adelson has struggled with a heavy debt load, and is looking to seize on an opportunity to have a publicly traded division in Hong Kong at a time when the IPO window is open.
Fellow Las Vegas gaming company, Wynn Resorts, listed its Macau unit last month, raising $1.87 billion.
(Editing by Bernard Orr)