Wynn to hit road to stump for planned stock offering

Tuesday, July 30, 2002 | 11:08 a.m.

Casino-resort developer Steve Wynn plans a roadshow for Wall Street financiers beginning Sept. 3 to promote the proposed public stock offering for his $2.5 billion Le Reve resort on the Las Vegas Strip, the Wall Street Journal reported today.

Wynn's Wynn Resorts is proceeding despite a tough IPO market, weakened by declines in the stock market since Wynn unveiled the stock sale plan June 17, the Journal said. Wynn hopes to raise $355 million to $408 million with the IPO, along with $350 million in second mortgage notes.

So far, he has scrapped together around $740 million from longtime friends and his own pocketbook to move ahead with Le Reve as well as a new casino in the Chinese territory of Macau, the Journal said.

Wynn backers think he will be able to pull off the IPO and the mortgage bond issuance.

Ron Baron, whose Baron Funds have invested $40 million in the project so far, told the Journal that Wynn will be able to beat the odds.

"Here you've got a guy who's been enormously successful, and you've got an opportunity to get in on the ground floor and see if he can do it again," Baron told the Journal. "And I'm betting he can."

The Journal said that even some competitors believe investors will back Wynn, despite the failure of the last big Las Vegas project, the $1.2 billion Aladdin Hotel and Casino. That project, backed by New York real-estate investor Jack Sommer and London Clubs International, filed for bankruptcy-law protection last October.

Calling the Aladdin "sadly ill-conceived," MGM MIRAGE President and Chief Financial Officer Jim Murren told the Journal he believes "the money will be there for Steve because casinos are profitable enterprises and his properties are known to be profitable."

Wynn's Mirage Resorts Inc. was sold to billionaire Kirk Kerkorian's MGM Grand Inc. in 2000 for $6.4 billion, creating MGM MIRAGE.

"Wynn has a reputation for getting the job done," the Journal reported, noting his success with such Las Vegas landmarks as the Mirage and Bellagio resorts.

Baron told the Journal that when Wynn built the Mirage, "the general opinion was he could go bankrupt. And, of course, he opened and made $200 million in the first year."

Wynn officials today declined comment.

Wynn paid $270 million for the venerable Desert Inn and Casino only two months after selling Mirage Resorts. Citing the then-robust performance of casino stocks and the draw of employee stock options, he announced in June the IPO for Le Reve.

Since then, the stock market has fallen by about 12 percent and casino stocks have suffered. Bear Stearns analyst Jason Ader noted that several casino companies have started openly voicing concern that the decline of the stock market will hurt many gamblers, the Journal said.