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MGM IPO raises $1.4 billion in Macau

31 May 2011

By Howard Stutz
MACAU -- A long-anticipated stock sale by MGM Resorts International on the Hong Kong Stock Exchange raised $1.4 billion in Asian markets Friday and left the Las Vegas gaming company with a controlling 51 percent stake in the MGM Grand Macau.

The initial public offering, under the subsidiary MGM China, was priced at the top of its indicative range. The company put 760 million shares, or 20 percent ownership of the 600-room MGM Grand Macau, available for purchase by investors.

Hong Kong businesswoman Pansy Ho, the company's joint-venture partner in the resort, retained a 29 percent ownership stake in the property.

In a statement, MGM Resorts said the offering price equals about $1.97 per share, representing net proceeds of approximately $1.4 billion.

The company did not comment on the IPO beyond the pricing. Similar Hong Kong IPOs in 2009 raised $2.4 billion for Las Vegas Sands Corp. and $1.63 billion for Wynn Resorts Ltd.

Cornerstone investors purchased a combined $190 million through the IPO. The group includes two Hong Kong business moguls and MGM Resorts' two largest shareholders, billionaire financier Kirk Kerkorian and hedge fund billionaire John Paulson.

Kerkorian is the 93-year-old founder of MGM Resorts who announced last month he was leaving the board in June but will remain a senior adviser. He invested $50 million in the IPO through his privately held Tracinda Corp.

Kerkorian, who lives in Los Angeles, owns 27 percent of MGM Resorts through Tracinda and is the company's largest shareholder.

Paulson, whose New York-based hedge fund has acquired large stakes in MGM Resorts, Caesars Entertainment Corp. and Boyd Gaming Corp., invested $75 million in the IPO.

According to Reuters News Service, the IPO will move Ho near the top of Asia's billionaire list, surpassing her father, casino mogul Stanley Ho, with an estimated wealth of nearly $5 billion. The valuation takes into consideration her stake in MGM China and other holdings.

The elder Ho, whose long-standing casino monopoly in Macau ended in 2002, has a fortune estimated at about $3 billion.

MGM Resorts MGM Resorts will receive $311 million in net proceeds from Pansy Ho as part of the IPO.

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