The offering by Melco, whose share price has more than doubled this year, "closed an hour after the opening, fueled up by most larger-scale hedge funds," a fund manager said. It was the largest placement since a stock market correction this month, which has seen the benchmark Hang Seng Index decline about 1,000 points since April. Credit Suisse is the sole bookrunner.

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Melco is considered by investors as a preferred exposure to Macau gaming, said a Hong Kong-based hedge fund manager at a US asset management company. At the same time, "hedge funds are still interested in the local bourse due to high trading volume."

Melco earlier this year clinched the last available gambling subconcession in Macau for US$900 million (HK$7.02 billion).

"The agreement could allow Melco to independently operate casinos thereafter," an analyst said.

"They can now negotiate directly with the government on land acquisition for future casino projects as the subconcession has no limit on the number of casinos."

Melco, which has plans for three casinos in Macau, is selling 63.6 million new shares with an indicative price range of HK$19 to HK$19.30 each, translating up to a 6.5 percent discount to Monday's closing price of HK$20.30, according to the sale document obtained by fund managers.

The company "will probably price the shares at the top end of the range amid strong demand," one source said.

The proceeds will be used for debt repayment and land acquisition in Macau. Major shareholders will not be allowed to sell more new shares in the three months after the placement.

Melco is partnering James Packer's Publishing & Broadcasting Ltd in acquiring a site in Macau for its third casino project, which aims to open as early as 2009, with a hotel and a block of serviced apartments. The construction and land acquisition cost is estimated at HK$3.5 billion.

Melco is studying a plan to sell about 10 to 15 percent of its Macau gaming joint venture with PBL on Nasdaq by the second half of the year to help fund casino projects.

"The proposed IPO could reach up to US$1 billion," sources close to the deal said.

Shares in Melco, which were suspended Tuesday, have surged 119 percent this year. Smaller Hong Kong- listed company Xinyi Glass Holdings raised HK$192 million from a share placement last week.