MGM Resorts set to control Macau JV
Source: Bloomberg News |
April 15, 2011, Friday
|
Print Edition
Print Edition
MGM Resorts International, the casino company founded by billionaire Kirk Kerkorian, will gain control of its Macau joint venture by buying shares from partner Pansy Ho.
Ho will sell 1 percent of MGM China Holdings Ltd to Kerkorian's company, lifting his stake in the venture to 51 percent, the companies said in a statement on Wednesday. Ho also plans to sell as much as 23 percent of the business in a Hong Kong initial public offering.
Majority control will enable MGM Resorts to consolidate the Macau operations on its books and take advantage of a gambling destination where revenue is four times that of the Las Vegas Strip. Ho's sale follows a family dispute that ended with her and some family members getting a stake in the company that controls SJM Holdings Ltd, which her father - billionaire Stanley Ho - built into Asia's biggest casino operator.
"Everyone will be a bit relieved now as the control from Pansy is reduced after what happened to the Ho family," Gabriel Chan, a Hong Kong-based consumer and gambling analyst for Credit Suisse Group AG, said by phone yesterday. "The structure is different from what the market expected."
Ho will also purchase US$300 million of MGM Resorts' convertible senior notes due 2015. The agreements are subject to regulatory approval and the IPO should be completed by June 30, MGM Resorts said.
MGM Resorts' half stake in the venture with Ho saw US$129.6 million operating income in 2010. The firm follows Wynn Resorts Ltd and Las Vegas Sands Corp in listing a minority stake in its Macau venture.
Ho will sell 1 percent of MGM China Holdings Ltd to Kerkorian's company, lifting his stake in the venture to 51 percent, the companies said in a statement on Wednesday. Ho also plans to sell as much as 23 percent of the business in a Hong Kong initial public offering.
Majority control will enable MGM Resorts to consolidate the Macau operations on its books and take advantage of a gambling destination where revenue is four times that of the Las Vegas Strip. Ho's sale follows a family dispute that ended with her and some family members getting a stake in the company that controls SJM Holdings Ltd, which her father - billionaire Stanley Ho - built into Asia's biggest casino operator.
"Everyone will be a bit relieved now as the control from Pansy is reduced after what happened to the Ho family," Gabriel Chan, a Hong Kong-based consumer and gambling analyst for Credit Suisse Group AG, said by phone yesterday. "The structure is different from what the market expected."
Ho will also purchase US$300 million of MGM Resorts' convertible senior notes due 2015. The agreements are subject to regulatory approval and the IPO should be completed by June 30, MGM Resorts said.
MGM Resorts' half stake in the venture with Ho saw US$129.6 million operating income in 2010. The firm follows Wynn Resorts Ltd and Las Vegas Sands Corp in listing a minority stake in its Macau venture.
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