MGM China Holdings shares open higher on HK debut
Posted By Admin on June 3, 2011
5 hours ago
HONG KONG — Macau casino giant MGM China Holdings opened 5.6 percent above their IPO price on its Hong Kong debut, in a $1.5 billion flotation that showed strong investor appetite for the gaming hub.
MGM’s shares touched HK$16.20 ($2.08) when trading started on Friday, well above their HK$15.34 sale price before settling back to HK$15.84, or 3.3 percent up, by the break on Friday.
The firm, a tie-up between Las Vegas-based MGM Resorts International and Pansy Ho, the daughter of Macau gambling tycoon Stanley Ho, said it sold 760 million shares as operators bet big on the territory.
“I’m very happy with the opening stock price — it is a very good indication of its future performance,” Ho told reporters at the firm’s listing ceremony in Hong Kong.
Macau, a former Portuguese colony that has transformed itself into a global gaming centre, is a key profit source for several US casino firms operating in the city, the only place in China that allows casino gambling.
The territory raked in a whopping $23.5 billion in gaming revenue last year, outpacing the Las Vegas Strip at least four-fold, with the city’s April revenue figures showing a nearly 45 percent year-on-year increase.
MGM’s share sale lured several high-profile cornerstone investors, including US hedge fund giant John Paulson and gaming billionaire Kirk Kerkorian.
Cornerstone investors are given the option to buy vast portions of stock in an IPO if they agree to hold the shares for a certain length of time.
Paulson made billions of dollars after being one of the few investors to predict the collapse of the US sub-prime mortgage market in 2007 that led to the global financial crisis.
MGM will have a 51 percent stake — and management control — in the listed joint venture.
In a report last year, New Jersey gaming regulators told MGM Resorts to cut its business ties with Pansy Ho — after deeming her “unsuitable” because of her father’s alleged organised crime links — or risk losing its state gaming licence.
The elder Ho has long denied allegations he allowed Macau’s notorious triads to operate in his casinos.
In response MGM said it would instead leave New Jersey by selling a 50 percent stake in an Atlantic City casino-resort so it could keep its casino-hotel in Macau.
In March, 89-year-old Stanley Ho said he had ended a bitter legal feud with family members, whom he accused of trying to steal his vast gambling empire and a fortune worth at least $3.1 billion.
Copyright © 2011 AFP. All rights reserved.
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