The stock prices of the Malaysian casino operator Resorts World and its parent Genting Group both rose this week on speculation that Resorts World might make a bid for the assets of a cash pressured casino operator in Macau.
Shares in Resorts World rose nearly six percent in just half a day’s trading on Monday, while its parent’s stock went up nearly four percent. Analysts pointed out Resorts World had previously been trading at a discount in comparison to its parent.
The activity was triggered by an announcement the companies had each purchased USD50 million worth of senior secured notes issued by MGM MIRAGE. This is a drop in the ocean in relation to MGM MIRAGE’s overall debt, which in December stood at USD8.6 billion just on its CityCenter project in Las Vegas. Nonetheless traders are likely to have scented potential M&A blood given the currently febrile atmosphere surrounding the markets in general and gaming stocks in particular.
Traders’ meat eating tendencies were probably further excited by more bad news for MGM MIRAGE following the announcement from New Jersey questioning the suitability of Pansy Ho as a 50 percent partner in the MGM Grand Macau.
