Casino giant takes control of MGM China
Pansy Ho Chiu-king has agreed to take a back seat in a restructuring announced last night, allowing MGM Resorts International to take majority control of MGM China Holdings when it lists in Hong Kong.
Under the terms of the deal, MGM Resorts said it would end up with 51 per cent of MGM China, up from 50 per cent previously, while Ho's stake would fall to 29 per cent from 50 per cent, with the remaining 20 per cent being offered to the public.
MGM China is intended to be the listed vehicle holding the MGM Macau casino property and gaming licence.
The estimated US$1 billion or so initial public offering was originally due in the second half of last year, but has suffered delays.
MGM Resorts said Ho had agreed to buy US$300 million of MGM Resorts' convertible senior notes. It said the terms of the notes would be similar to those of MGM Resorts' existing 4.25 per cent convertible senior notes which fall due 2015.
'These agreements remain subject to certain conditions, including required approvals of the Hong Kong stock exchange, and there can be no assurance that the proposed transactions will be consummated,' MGM Resorts added.
The US$800 million IPO was originally due in the second half of last year, but has suffered delays.
Additional scrutiny has been focused on Ho and her agreement with MGM after a report released by New Jersey gaming regulators in the United States in March last year cited the junket influence within her father's VIP rooms as a prime concern.
Ho's father, Stanley Ho Hung-sun, recently surrendered control over his Macau gambling empire.
Macau's booming gaming revenues have lifted profits at MGM International, which said in February that the MGM Macau passed the Bellagio as the best-performing property in its portfolio of 14 mainly Las Vegas-based casino resorts.
The MGM Macau booked record revenue of US$580 million in the three months to December. Cash flow, or earnings before interest, tax, depreciation and amortisation (ebitda), rose to US$142 million, tripling from a year earlier and up 71 per cent from the third quarter. The Las Vegas Bellagio booked ebitda of US$75.5 million during the quarter on revenue of US$268.8 million.