By Kate O’Keeffe and Nisha Gopalan
of DOW JONES NEWSWIRES
HONG KONG -(Dow Jones)- MGM China Holdings Ltd., which is planning a US$1 billion initial public offering, is working on addressing the requests of the Hong Kong stock exchange so it can get the go-ahead to list in the city, MGM Resorts International (MGM) said.
The Hong Kong stock exchange’s listing committee had held a meeting to consider MGM China’s application to list on Thursday, April 28, and issued a comment letter as a part of its ongoing review process, MGM said in a statement Friday.
MGM Resorts didn’t elaborate on what was in the letter, but noted that once the IPO is complete, it will have a 51% stake, as well as management control, of MGM China.
MGM China, which operates a Macau casino, is a joint venture between MGM Resorts and Ho, a daughter of the enclave’s gambling tycoon Stanley Ho. Friday, Hong Kong’s Chinese-language Apple Daily reported that the stock exchange had questions on who would be the controlling shareholder of MGM China following its listing.
“MGM China continues to work closely with the Hong Kong stock exchange to address all remaining items in order to achieve a prompt listing of its shares on the Hong Kong stock exchange,” MGM Resorts said. “The timing or terms of any such listing have not yet been determined.”
MGM China had filed an A1 Form–the first formal step in declaring intent to list in Hong Kong–in September.
Once a company gains listing approval from the listing committee of the Hong Kong stock exchange, which had heard MGM’s case to list Thursday, the next steps typically involve pre-marketing followed by a roadshow and then a listing within six weeks.
Wall Street analysts had hailed MGM Resorts’ plans to take a controlling stake of the Macau operator, noting it gave the debt-laden U.S. casino operator more exposure to the profitable Macau market and management control over the venture.
Under the deal, MGM Resorts will have 51% ownership, Ho will have a 29% interest, and the rest will be in public hands.
MGM and Ho have split ownership of the joint venture equally at the moment.
The listing plan comes after the March settlement of a months-long family feud for control of Stanley Ho’s multibillion-dollar gambling empire. A family feud burst into the open earlier this year when the gambling tycoon accused the children of his second wife, including Pansy Ho, of colluding with his third wife, Ina Chan, to steal a company that held the bulk of his assets. They denied his accusations. The dispute was eventually resolved, and Stanley Ho dropped his lawsuit against his family members.
JP Morgan Chase & Co., Bank of America Merrill Lynch, Morgan Stanley, and BNP Paribas SA are the bankers on the deal, the person said.
Wynn Resorts Ltd. (WYNN) and Las Vegas Sands Corp. (LVS) both listed their Macau assets in Hong Kong in 2009, forming Wynn Macau Ltd. (1128.HK) and Sands China Ltd. (1928.HK), respectively.
Shares in those two companies rose over 80% last year, outperforming Hong Kong’s benchmark Hang Seng Index’s 5% rise.
The three other casino operators in Macau, the only city in China where gambling is legal, are SJM Holdings Ltd. (0880.HK), Galaxy Entertainment Ltd. (0027.HK) and Melco Crown Entertainment Ltd. (MPEL).
