MGM China shares to debut in Hong Kong

HONG KONG: Macau's MGM China Holdings will make its Hong Kong trading debut Friday, after raising $1.5 billion in a share sale that underlined casino operators' enthusiasm for the world's biggest gaming hub.

The firm, a tie-up between Las Vegas-based MGM Resorts International and Pansy Ho, the daughter of Macau gambling tycoon Stanley Ho, said last month that it sold 760 million shares at HK$15.34 ($1.97) each.

Macau, a former Portuguese colony that has transformed itself into a gaming powerhouse, 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 by 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.

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.

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.

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 rumours 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, the 89-year-old tycoon said he had ended a bitter legal feud with family members -- including Pansy Ho -- whom he accused of trying to steal his vast gambling empire and a fortune worth at least $3.1 billion.

Copyright AFP (Agence France-Presse), 2011