MGM China Sets Price Range for $1.5 Billion Hong Kong IPO

Pansy Ho, a daughter of billionaire Stanley Ho, is seeking as much as HK$11.7 billion ($1.5 billion) from an initial public offering of casino operator MGM China Holdings Ltd., according to a term sheet for the sale.

Pansy Ho will offer 760 million shares at HK$12.36 to HK$15.34 apiece, the terms show. MGM China is a 50-50 joint venture between her and MGM Resorts International. (MGM) Pansy Ho, 48, is chairwoman and executive director of MGM China, according to a filing to the Hong Kong stock exchange on May 9.

The casino operator is starting the sale after gambling revenue in Macau rose 58 percent last year to 188.3 billion patacas ($23.5 billion), about four times that of the Las Vegas Strip. MGM China received orders covering all the stock offered to institutional investors on the first day of marketing the IPO, two people with knowledge of the matter said.

Bank of America Corp., JPMorgan Chase & Co. (JPM) and Morgan Stanley are the global coordinators for the sale, according to the terms. BNP Paribas (BNP), CLSA Ltd., Deutsche Bank AG (DBK) and Royal Bank of Scotland Group Plc are joint bookrunners, the terms show. MGM China will hold a press conference for the share sale on May 19, according to an e-mailed statement.

Stanley Ho, 89, held a gambling monopoly in Macau for four decades before the entry of foreign casino operators starting from 2002. Casino revenue in Macau climbed 43 percent to 79 billion patacas in the first four months of this year, according to data from Macau’s Gaming Inspection and Coordination Bureau.

Revenue Forecast

Macau gambling revenue may rise more than 25 percent in 2011, cementing the city’s position as the world’s biggest gambling hub by sales, said Standard & Poor’s credit analyst Joe Poon said in a report.

Pansy Ho will sell a 20 percent stake in MGM China to the public and another 1 percent stake to MGM Resorts, leaving her with 29 percent, the Las Vegas-based company said in a statement on April 13.

MGM Resorts, founded by billionaire Kirk Kerkorian, would gain control of MGM China by acquiring the 1 percent stake from Pansy Ho, according to the statement.

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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