Sat, Jun 04, 2011 - Page 10 News List

MGM China shares up in HK trading debut

AP, HONG KONG

Pansy Ho, left, chairwoman and executive director of MGM China Holdings Ltd and Lawrence Fok, chief marketing officer at Kong Kong Exchanges and Clearing Ltd, pose at the stock exchange in Hong Kong yesterday.

Photo: AFP

Macau casino operator MGM China Holdings Ltd (美高梅中國控股) rose up to 6 percent on its Hong Kong stock exchange debut yesterday, highlighting strong investor interest in the world’s biggest gambling market.

Shares in MGM China, which is controlled by Las Vegas-based MGM Resorts International, rose to HK$16.26 (US$2.09), up HK$0.92, after trading began yesterday morning, before easing back to HK$15.84.

Meanwhile, the benchmark Hang Seng Index dipped about 0.3 percent.

The company raised HK$11.7 billion by selling 760 million shares at HK$15.34, the top end of the offer price range.

MGM China chairwoman Pansy Ho (何超瓊) said she was “satisfied” with trading.

“We all think is an encouraging indication,” Ho said after a listing ceremony at the stock exchange.

Local investors in Hong Kong applied for 20 times more shares than were available to them, prompting the company to triple its proportion of total shares sold to 30 percent.

The remaining 70 percent of the initial public offering (IPO) was also “significantly oversubscribed” by big global investors, MGM China said.

Those investors included Tracinda Corp, billionaire investor Kirk Kerkorian’s investment arm, and Paulson & Co Inc, the New York hedge fund run by John Paulson. Tracinda and Paulson are also MGM Resorts’ two biggest shareholders.

The high demand for shares in the IPO illustrates how big profits in Macau’s casino industry, the world’s top gambling market, are attracting investor interest.

Casino revenues in the former Portuguese colony, which was handed back to China in 1999, have rocketed since a four-decade gambling monopoly was broken up in 2002.

Last year, Macau raked in US$23.5 billion in gambling revenue, about four times more than the Las Vegas strip’s US$5.8 billion. Monthly revenues from February to last moth jumped at least 42 percent over the year before.

MGM’s casino is one of 34 in Macau, the only place in China where casino gambling is legal.

Following the IPO, MGM Resorts has 51 percent ownership and management control of MGM China, Ho has a 29 percent stake and other shareholders own the remaining 20 percent. Previously, it was a 50-50 joint venture between MGM Resorts and Ho.

Ho is the 48-year-old daughter of gambling tycoon Stanley Ho (何鴻燊), considered the father of modern gambling in China.

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