Pansy Ho May Raise $1.5 Billion in MGM China Share Sale
May 23, 2011, 2:34 AM EDTBy Robert Fenner
(Adds Ho family dispute in 10th paragraph.)
May 23 (Bloomberg) -- Pansy Ho, daughter of billionaire Stanley Ho, may raise as much as HK$11.7 billion ($1.5 billion) from an initial public offering of Macau casino operator MGM China Holdings Ltd.
The company will sell 760 million shares priced from HK$12.36 to HK$15.34, MGM China said in a filing today. At the top of the range, the Hong Kong-based company will have a market value of HK$58.3 billion and trade at 37.2 times historical earnings, according to its prospectus.
Billionaires John Paulson and Kirk Kerkorian, the founder of MGM Resorts International, are among the cornerstone investors in the offering and have committed to buying $125 million worth of stock. MGM China said it expects net proceeds of HK$11.1 billion after paying commissions and other costs, assuming a sale at the peak of the price range, and will use the funds to repay debt.
Pansy Ho, the 48-year chairman and executive director of MGM China, will cut her stake to 29 percent after the IPO and selling 1 percent to MGM Resorts. The Las Vegas-based company will then control 51 percent of MGM China, allowing it to book earnings from the business in Macau, where casino revenue is four times that of the Las Vegas Strip.
The stock is due to start trading in Hong Kong on June 3 after pricing is announced on June 2, MGM China said.
Profit will be at least HK$1.45 billion, or 38 Hong Kong cents a share, in the six months ending June 30, MGM China said in the prospectus.
Market Share
As of December, the company had an 11.4 percent market share of the 33 casinos that operated in Macau, the only place in China where gambling is legal. The former Portuguese colony now has 34 casinos, after Galaxy Entertainment Group Ltd. opened the Galaxy Macau on May 15, according to data on the city government’s website.
Stanley Ho, 89, held a gambling monopoly in Macau for four decades before the government allowed the entry of foreign casino operators. Casino revenue in Macau climbed 43 percent to 79 billion patacas ($9.9 billion) in the first four months of this year, based on figures from Macau’s Gaming Inspection and Coordination Bureau.
Macau gambling revenue may rise more than 25 percent this year, cementing the city’s position as the world’s biggest gambling hub by sales, according to Joe Poon, a Standard & Poor’s credit analyst.
Family Dispute
Pansy Ho, one of Stanley Ho’s 16 surviving children, was involved in a dispute with her father this year over the family’s stake in Sociedade de Turismo e Diversoes de Macau SA, which controls SJM Holdings Ltd., Asia’s biggest casino company by sales. Stanley Ho transferred almost his entire stake to family members to resolve the dispute.
Angela Leong On Kei, mother of Stanley Ho’s five youngest children and managing director of SJM, got 6 percent of STDM, , as the company is also known, while Pansy Ho and other family members got 25.538 percent.
Pansy Ho is also managing director of Shun Tak Holdings Ltd., a property developer that operates ferry services from Hong Kong to Macau, and owns 11 percent of the company, according to data compiled by Bloomberg.
Rich List
The share sale may make Pansy Ho Hong Kong’s richest woman, based on figures in Forbes magazine’s January list of Hong Kong’s 40 wealthiest people. Eleanor Kwok, vice chairman Sa Sa International Holdings Ltd., was the highest-ranking woman, sharing the 34th spot with husband Simon Kwok with a combined net worth of $1.19 billion.
Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley are joint coordinators, bookrunners and managers of the MGM China share sale; BNP Paribas, CLSA Asia Pacific, Deutsche Bank AG and Royal Bank of Scotland Group Plc are joint bookrunners and managers; and Commerzbank AG is also managing the sale, according to the filing.
Paulson & Co. will buy $75 million worth of stock in the offering and Kerkorian’s Tracinda Corp. will purchase $50 million, the prospectus shows. The other cornerstone holders include Cheer Selection Ltd. with plans to acquire $40 million of shares, and Dornbirn Inc. which intends to spend $25 million.
--Editors: Lena Lee, Frank Longid
To contact the reporter on this story: Robert Fenner in Melbourne at rfenner@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
