Stanley Ho, Packer Venture to Build 2nd Macau Casino - Thursday 12th of May 2005

Kerry Packer's Publishing & Broadcasting Ltd., Australia's biggest casino owner, and Stanley Ho's Melco International Development Ltd. will build a second casino in Macau, where gaming revenue is forecast to rise 20 percent in the next four years. The companies paid $214 million for land on Macau's Cotai Strip, where Las Vegas Sands Corp. wants to develop into a $12 billion Vegas- themed gambling strip.

The casino will feature an underwater gaming hall with 450 tables and 3,000 slots, Sydney-based Publishing & Broadcasting said in a statement today. The complex will also have two hotels, a shopping mall and a 4,000 seat concert hall. Ho, who was born in 1921, in November teamed with 67-year-old Packer, Australia's richest man, to meet competition from Las Vegas casino owners Steve Wynn and Sheldon Adelson after losing his 42-year Macau gambling monopoly. Adelson's Las Vegas Sands opened its first Macau casino last year and Wynn's resort will debut in 2006.

With China's growth and its rising middle class, Macau's potential as the next Las Vegas is enormous and that's why they want to expand there,'' said Olivia Cartwright, an analyst at Commonwealth Securities Ltd. in Sydney, who has a ``buy'' rating on Publishing & Broadcasting. Packer and Ho's new casino, scheduled to open by mid-2008, will be operated by Ho's Sociedade de Jogos de Macau S.A., the owner of one of the three gaming licenses in Macau. Publishing & Broadcasting shares rose 48 cents, or 3.3 percent, to A$14.88 at the 4 p.m. close of trade in Sydney, their biggest gain in three weeks.

The stock has dropped 15 percent this year after a 40 percent gain in 2004. Asian Expansion Melco shares were halted from trade in Hong Kong yesterday. The company plans to raise about HK$1.6 billion ($205 million) selling shares to fund the land purchase, the Standard newspaper reported earlier today, without saying where it got the information. Publishing & Broadcasting said the acquisition of the land will be funded by debt and existing equity. Packer, who is worth $5 billion according to Forbes magazine, and Ho, with an estimated fortune of $3.6 billion, are already developing the Park Hyatt Hotel & Casino in Macau, which is scheduled to open next year with 200 gambling tables and 1,300 slot machines.

The venture has also bid to build Singapore's first casino. Macau, a former Portuguese colony that reverted to Chinese rule in 1999, ended Ho's 42-year casino monopoly in 2001. Adelson's Las Vegas Sands Corp., which owns the Venetian casino, opened the first Western casino in 2004. Gambling revenue in Macau rose 44 percent to $5 billion last year and will increase 20 percent over the next four years, according to Deutsche Bank analyst Marc Falcone. Publishing & Broadcasting, which also owns Australia's top ranked television network, gets 43 percent of its revenue from casinos. It paid A$1.8 billion for Melbourne's Crown Casino in 1999 and last year bought Perth's only casino, Burswood, for A$637 million.

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