MGM China Holdings Ltd, the casino joint venture between MGM Resorts International and Pansy Ho (何超瓊), could raise as much as US$1.5 billion in its Hong Kong initial public offering, two people with knowledge of the matter said.
The Macau casino operator began gauging investors’ demand yesterday and aims to start trading on June 3, said the people, who declined to be identified because the information is private. Stock worth US$1 billion to US$1.5 billion may be offered in the sale, they said.
MGM China is selling shares as rivals, including Wynn Resorts Ltd (永利度假村) and Las Vegas Sands Corp, said first-quarter revenue from Macau, the only place in China where casinos are legal, surged. Gambling revenue in the former Portuguese colony soared 58 percent last year to 188.3 billion patacas (US$23.5 billion), about four times that of the Las Vegas Strip.
“It’s very good timing for MGM to sell stock with Macau casinos posting record profits,” said Kenny Tang, Hong Kong-based executive director of AMTD Financial Planning Ltd (尚乘財富策劃有限公司). “Demand still outstrips supply in Macau’s gambling market and people expect revenue to climb further.”
MGM China’s management will start meeting potential investors on Tuesday next week to market the offering, the people with knowledge of the matter said. Bank of America Corp’s Merrill Lynch unit, JPMorgan Chase & Co, and Morgan Stanley are managing the sale. Sidney Luk, a Hong Kong-based spokeswoman for MGM China, declined to comment.
The company had planned to raise about US$800 million, according to two people with knowledge of the matter last month.
Ho’s father, billionaire Stanley Ho (何鴻燊), held a gambling monopoly in Macau for four decades before the entry of foreign casino operators starting from 2002. Casino revenue in Macau climbed 43 percent to 79 billion patacas in the first four months of this year, according to data from the territory’s Gaming Inspection and Coordination Bureau.
Macau gambling revenue may increase by more than 25 percent this year, cementing the territory’s position as the world’s biggest gambling hub by sales, Standard & Poor’s credit analyst Joe Poon said in a report.
MGM Resorts, founded by Kirk Kerkorian, would gain control of MGM China by acquiring shares from Pansy Ho, the US company said in a statement on April 13. Ho would sell 1 percent of MGM China Holdings Ltd to Kerkorian’s company, lifting his stake to 51 percent, according to the release.