MGM International Take Control of Macau Casino

MGM to become majority shareholders and take control of the MGM Grand Macau Casino in China. MGM Resorts International, with roots in Nevada is the second largest gaming company in the world, and owns several major resorts.

ua Egas Moniz 44, 4050-234 Porto, Portugal (I-Newswire) May 20, 2011 - Porto, Portugal MGM to Control Macau Casino by becoming majority shareholders in the MGM Grand. Previously a joint venture between the casino giants and the Ho family, the deal will take MGM’s stake in the resort to 51%, allowing the company to take full control of the casino and to streamline operations with their other casinos around the globe. The deal reportedly sees Pansy Ho, daughter of the head of the Ho dynasty, trading a 1% share in the casino for senior notes in MGM in a deal expected to generate $300 million dollars for the company. The completion of the deal will likely see the casino listed on the Hong Kong Stock Exchange under the listing MGM China Holding Company, with the IPO (Initial Public Offering) expected to be completed on 30th June 2011.

The deal marks the end of a period of complex negotiation following the Stanley Ho scandal, when the powerful family’s leader was implicated in allegations of financing organised crime and his family and business were divided over the division of assets as he began to hand over control. Promising early negotiations with MGM over the Macau casino appeared to cool off following the scandal and protracted internal conflict, but once Stanley’s daughter Pansy took control of SJM Holdings, the Grand Casino’s licence holder, both parties returned to the table and appear to have reached a successful resolution. The controlling stake in the resort will be sold to MGM, allowing them to consolidate their ownership and prepare to offer shares on the stock exchange. Meanwhile, Pansy Ho looks set to benefit from a 29% stake in MGM China Holding Company when the company begins trading publicly at the end of June, as well as an undisclosed figure in senior convertible notes in MGM.

The MGM Grand will now be fully incorporated into the MGM chain of luxury casinos and resorts around the world, including such famous resorts as the Mirage, the Luxor and the Bellagio. In just over a decade, MGM has become one of the largest and most influential companies in the gaming industry, and this latest deal will help to bolster that position as well as providing a launch pad for other Asian markets. As the only region in China where gambling is legal, Macau is a hugely popular destination for both Chinese and international tourists. Estimated to be at least four times as profitable as comparable casinos in Las Vegas, any Macau casino represents an incredible investment opportunity within the gaming industry. This has seen their stocks rise and Asian and Western investors scrambling to get involved. With the completion of this deal and a successful flotation on the Hong Kong Stock exchange, the MGM will be the last of the gambling license holders in Macau to go public.

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