MGM China bids to raise $1bn in IPO

City A.M. Reporter
MGM China, the joint venture between MGM Resorts International and casino mogul Stanley Ho’s daughter Pansy Ho, has started pre-marketing for an initial public offering in Hong Kong expected to raise between $1bn and $1.5bn.

MGM China kicked off its marketing campaign for potential investors after it passed through a listing hearing in Hong Kong, with the IPO expected to begin on 23 May and a trading debut in early June.

The firm is hoping to capitalise on a gambling boom in Macau. The Chinese territory earned $2.56bn in gambling revenues last month, according to a government report, a 45 per cent rise year-on-year that puts it on track to rake in five times as much as the Las Vegas strip this year.

MGM Resorts International announced in April a plan for the initial public offering of its Macau casino joint venture, in which MGM resorts would be the majority owner with a 51 per cent holding.

Ho will retain a 29 per cent holding in the company, with the remainder being sold in the offering.

The firm plans to sell 760m new shares in a primary offering, or 20 per cent of the enlarged company’s capital.

MGM China plans to use proceeds of the offering to repay obligations owed to Grand Paradise Macau.

Bank of America Merrill Lynch, JPMorgan and Morgan Stanley are all thought to be acting as joint global coordinators for the stock offering.

Analysts have lauded MGM Resorts’ plan to take a controlling stake in the venture, because it will give it a foothold in Macau and exposure to emerging markets. That should allow it to offset tough markets in its home US market.