Thursday, May 16, 2013

Pansy Ho

MGM China gets US$190m investments for its IPO

Funds come from 4 rich investors led by hedge fund manager John Paulson

(HONG KONG) Macau casino operator MGM China, co-owned by MGM Resorts International and Hong Kong businesswoman Pansy Ho, has received US$190 million from four wealthy cornerstone investors for its US$1.5 billion initial public offering (IPO) in Hong Kong.

Billionaire hedge fund manager John Paulson is leading the pack with an investment of US$75 million, according to two sources with direct knowledge of the IPO details.

Las Vegas gaming magnate Kirk Kerkorian is investing US$50 million through his private holding company, Trancinda Corp. The nonagenarian and founder stepped down from MGM Resorts' board in April but remains a senior adviser to the firm.

Hong Kong property tycoons Poon Jing of Asia Standard and Walter Kwok of Sun Hung Kai Properties are investing US$40 million and US$25 million respectively, said the sources, who asked not to be cited by name because details of the IPO are not yet public.

Gaming revenue in Macau, the world's largest gambling market, has soared with unabated demand from mainland visitors, flocking to the only place in China where casino gambling is legal.

Revenues in the former Portuguese enclave reached US$10 billion in the first four months of the year, equalling Las Vegas's earnings for the whole of last year.

Macau's market was likely to remain a hit with investors, said analyst Victor Yip of UOB Kay Hian in Hong Kong.

'It seems like the gaming sector is a really hot sector these days, as you can tell from the trading volume, and also from the share price performance of those listed plays,' Mr Yip added. 'I am sure the IPO will show a good number of oversubscriptions.'

The launch of Galaxy Entertainment Group Ltd's new US$2 billion casino earlier this week is likely to propel even stronger revenue growth, casino magnate Steve Wynn told reporters on Tuesday.

Bank of America Merrill Lynch, JPMorgan Chase & Co and Morgan Stanley are acting as joint global coordinators for MGM China's offering.

Ms Ho, daughter of Stanley Ho - dubbed Macau's casino king for his pervasive influence over the Macau gaming sector - will sell down her 50 per cent existing stake to 29 per cent in MGM China. MGM Resorts will hold 51 per cent while the rest will be sold to the public.

MGM's links with Ms Ho have come under official scrutiny in the United States, with New Jersey's State Division of Gaming Enforcement declaring that Ms Ho was an 'unsuitable' associate due to its belief that her father has links to organised crime, prompting the firm to yield holdings in the state. - Reuters   2011 May 19

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