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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Hong Kong officials want more info on MGM IPO

29 April 2011

MACAU -- Media in China reported Thursday night that financial officials want more information about a planned initial public offering on the Hong Kong Stock Exchange by MGM Resorts International.

The Listing Committee of Hong Kong Exchanges & Clearing Ltd. was reportedly concerned about the shareholding structure of the company after the planned listing.

MGM Resorts confirmed in a statement Friday morning the Listing Committee held a meeting Thursday to consider the IPO application.

"The Listing Committee has issued a comment letter as a part of their ongoing review process," the company said. "MGM China continues to work closely with the (stock exchange) to address all remaining items in order to achieve a prompt listing of its shares. The timing or terms of any such listing have not yet been determined, and there is no assurance as to whether MGM China will ultimately proceed with the listing, or whether the application will be approved the (stock exchange)."

Under terms of the filing, Hong Kong businesswoman Pansy Ho, the company's joint venture partner in the MGM Grand Macau, gave the U.S. casino operator majority stake in the IPO.

"The committee doubts who will be the controlling shareholder, and concerns about possible shareholder disputes in the future," according to a report in the Apple Daily, a Hong Kong-based newspaper.

Under the agreement signed between MGM Resorts and Ho on April 13, MGM Resorts will own 51 percent of MGM China after the Hong Kong IPO. Ho would retain a 29 percent interest. Currently, MGM and Ho each own a 50 percent stake in the 600-room hotel-casino.

"The press reports that suggest MGM China's proposed corporate structure would be, if accurate, modestly negative for the shares," Jefferies & Co. gaming analyst David Katz told investors. "The proposed structure was intended for MGM to retain majority ownership of its most valuable asset, while receiving a $300 million cash infusion into its U.S. parent."
Hong Kong officials want more info on MGM IPO is republished from Online.CasinoCity.com.