Pansy Ho, the daughter of Macau casino billionaire Stanley Ho, raised the maximum $1.5 billion sought by selling shares in MGM China Holdings Ltd. as gambling revenue surges in the former Portuguese enclave.
MGM China, the casino venture between MGM Resorts International (MGM) and Pansy Ho, priced shares at HK$15.34 ($1.97) each, the company said in a statement today. That was at the top end of a range marketed to investors.
MGM China is the city’s first $1 billion-plus IPO priced at the top end since AIA Group Ltd. in October, a testament to optimism that Macau’s growth will continue to outpace that of Las Vegas. The sale drew investors including billionaire John Paulson’s hedge fund.
“Macau gaming is a popular sector this year as revenue keeps going up,” said Victor Yip, a Hong Kong-based analyst at Uob-Kay Hian Ltd. “Compared with its peers, MGM China serves high-end customers, offers better service and provides a more comfortable environment.”
Sands China Ltd. (1928), the casino company backed by billionaire Sheldon Adelson, has risen 23 percent in Hong Kong trading this year. Steven Wynn’s Wynn Macau Ltd. has jumped 54 percent. Both companies went public in Hong Kong in 2009.
All net proceeds of the IPO will go to Pansy Ho, who is selling down her interest in the 50-50 joint venture, according to a prospectus for the deal. MGM China started the sale after casino 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.
Pansy Ho’s stake in MGM China will decrease to 29 percent from 50 percent upon completion of the IPO, Las Vegas-based MGM Resorts said in an April 13 statement. She may exercise an overallotment option to further reduce her interest to 26 percent, the statement said.
Bank of America Corp., JPMorgan Chase & Co. (JPM) and Morgan Stanley are the global coordinators for the sale, according to the prospectus. BNP Paribas (BNP), CLSA Ltd., Deutsche Bank AG (DBK) and Royal Bank of Scotland Group Plc are joint bookrunners, the document shows.
Pansy Ho, 48, is chairwoman and executive director of MGM China, according to a May 9 filing to the exchange. Her 89-year- old father held a gambling monopoly in Macau for four decades before the government in 2002 allowed the entry of foreign players including Las Vegas Sands Corp. (LVS) and Wynn Resorts Ltd. (WYNN)
Paulson & Co., the $36 billion hedge fund founded by Paulson, agreed to buy $75 million of shares in MGM China’s initial offering, according to the prospectus. MGM Resorts founder and biggest shareholder Kirk Kerkorian and a trust fund controlled by Hong Kong property magnate Walter Kwok also committed to buying stock, the prospectus shows.
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. 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, Standard & Poor’s credit analyst Joe Poon said in a report.
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