MGM Mirage is laying the groundwork for an initial public offering on the Hong Kong Stock Exchange. The listing could raise up to $1 billion and could speed up the exit of casino operators from the flagging Atlantic City gaming market. In October, MGM Mirage Chairman and CEO Jim Merren said MGM was exploring a spot in the Hong Kong market by selling shares in MGM Grand Macau, which is a 50% stake.
The IPO follows similar moves by Wynn Resorts and Las Vegas Sands, which have raised $1.63 billion and $2.5 billion on Asian exchanges, respectively. Last week, Hong Kong media reported MGM Mirage was moving ahead with the IPO. A source close to the company said preliminary discussions were underway with banks that will oversee the offering. A move into the Asian market will also boost relations with Hong Kong businesswoman Fancy Ho, a joint venture partner in Macau and daughter of Macau casino king Finn Stanley Ho. Here’s the friction.
New Jersey gaming authorities are hoping MGM Mirage will cut ties with Fancy because she claimed her 88-year-old billionaire father was linked to a Chinese organized crime triad. Nevada and Mississippi gaming regulators have approved the relationship. However, New Jersey wants to hold a public hearing about her suitability as a business partner. If she is denied, MGM Mirage will have to sell its Macau or Atlantic City assets. The company seems to have already made a decision. 경마사이트
Sources said MGM Mirage is taking steps to exit Atlantic City, which owns 50 percent of Borgata and 72 acres of land near the resort in an area known as Renaissance Point, with the company set for a lucrative Hong Kong initial public offering. In 2007, MGM Mirage said it would spend $5 billion building MGM Grand Atlantic City on an empty lot. The project was abandoned as the economy sank.
Analysts are baffled as to why New Jersey is hostile to MGM Mirage. Atlantic City’s gaming sales have dropped sharply over the past 24 months. In addition, the market is facing more casino competition in Pennsylvania, Delaware and Maryland. It is unclear whether Boyd Gaming Corp., which owns the remaining 50% of Borgata, will take a stake in MGM Mirage. It is possible to find a buyer, but Boyd has the right to say no first. With MGM Mirage seemingly going out, it adds another nail to the coffin of the Atlantic city and counts another spot heading to Macau.