Companies

MGM China targets $1.5 billion IPO in Hong Kong

By Farah Master (China Daily)
Updated: 2011-05-21 10:32

HONG KONG - MGM China Holdings, owned by US casino operator MGM Resorts International and Hong Kong businesswoman Pansy Ho, is planning an initial public offering to boost expansion in China and elsewhere in Asia.

MGM, which is opening an MGM Grand hotel this year in the Chinese resort of Sanya, is looking to expand into Taiwan with non-gaming and leisure properties, Pansy Ho said on Thursday.

Related readings:  MGM China sets IPO price range  Hainan Airlines still keen to buy MGM stake  MGM China offering likely in first quarter  China welcomes MGM with open arms

The Macao casino operator is planning to raise up to $1.5 billion in a Hong Kong IPO, securing $190 million from cornerstone investors including the billionaire hedge fund manager John Paulson.

The IPO comes at a time when the world's largest gaming market is red hot, with Macao's gambling revenues at record highs and dwarfing those of Las Vegas. January to April gaming revenue totaled $10 billion, matching Las Vegas's total for the whole of 2010.

Pansy Ho, speaking publicly for the first time since a legal spat with her father, the casino tycoon Stanley Ho, said she would maintain a strategic role in the firm, despite nearly halving her stake.

"I believe that to be an MVP, most valuable player, like when you are in a ball game, you do not always have to be the one making the goals, you would also like to be there to be the best assistant," she said at a news conference.

Media were restricted from asking questions about the investment risk if Pansy Ho were to exit the investment completely.

After MGM China's listing, MGM Resorts will be the biggest shareholder with 50 percent of the venture, while Ho will sell down her 50 percent stake to between 26 and 29 percent.

MGM China is one of six casino firms allowed to operate in Macao, which is an hour from Hong Kong by ferry.

US casino billionaires Sheldon Adelson of Las Vegas Sands Corp and Steve Wynn of Wynn Resorts Holdings operate rival Macao casinos with Sands China Ltd and Wynn Macau Ltd.

MGM also competes against SJM Holdings Ltd, Stanley Ho's sprawling gaming conglomerate. Ho, 89 and known as Macao's casino king due to his lucrative monopoly on the industry until 2002, controls around 30 percent of the market.

Melco Crown Entertainment Ltd and Galaxy Entertainment Group, along with Sands China, operate casinos on Macao's developing Cotai strip and on the glitzy main strip where MGM has its towering bronze, gold and silver edifice.

MGM is waiting for government approval before it can start construction on the still scaffold-ridden strip, home to the Venetian, City of Dreams and the $2 billion newly opened Galaxy Macau.

"We have been very hopeful that this (approval) obviously could happen within the year," Pansy Ho said.

Reuters