MGM China Holdings, a joint venture between Las Vegas based MGM Resorts International and local businesswoman Pansy Ho Chiu King, began pre-marketing their initial public offering (IPO) yesterday with plans to raise as much as USD 1.5 billion (MOP 12 billion) ahead of a Hong Kong listing next month.
The company will hold an investor road show on May 17 and plans to start introduce its Hong Kong retail offering on May 23, with trading to begin on June 3, Dow Jones Newswires reported, citing an unnamed source.
The US gaming firm said last month that Hong Kong’s stock exchange had asked for more information concerning its plans before approving the IPO, without elaborating on the bourse’s request.
Last month, MGM Resorts International announced that it had entered into agreements with Pansy Ho that will give it a controlling stake in their Macau joint venture when it lists in Hong Kong.
“The proposed initial public offering of the shares of MGM China Holdings Limited on the Hong Kong Stock Exchange and related transactions will be structured so that MGM Resorts will obtain 51 percent ownership, and management control of MGM China upon consummation of the offering,” the company said in a statement.
Currently MGM Resorts and Pansy Ho each own an equal 50 percent share of MGM Macau. However, after the IPO the daughter of tycoon Stanley Ho will retain 29 percent of the company, while public shareholders will own the remaining 20 percent.
During pre-marketing, a company and its bankers gauge investor interest in an IPO and decide on a price range for the deal. The road show is the official book-building period when a final price is set.
J.P. Morgan Chase & Co., Bank of America-Merrill Lynch, Morgan Stanley are the bankers of the deal, the source said.
Macau to lead
Macau is likely to see another year of strong growth in 2011, solidifying its position as the world’s largest single gaming market by revenue, according to the report titled ‘Asia-Pacific Gaming: Macau’s Strong Growth Has Upped The Stakes For Other Markets,’ that Standard & Poor’s Ratings Services recently released.
“We expect gaming revenue in Macau to grow by more than 25 percent in 2011, provided China’s economic growth doesn’t slow down more than we expect or visitation levels drop drastically,” said the company’s credit analyst Joe Poon.
“While such growth is significantly slower than the 57.8 percent in 2010, the industry is now growing off a much higher base.”
The report says Standard & Poor’s remains cautiously positive about the Asia-Pacific gaming industry as a whole. It also suggests that Singapore is now the second largest casino gaming market in the Asia-Pacific, just a year after it opened two integrated casino resorts.
“As a region, the industry weathered the global financial crisis well and has shown its cash-generative nature. For the first time since the global crisis, all rated pure casino operators in Asia-Pacific have stable or positive outlooks,” said Poon.