MGM Mirage (MGM) is marching ahead with its Hong Kong initial public offering (IPO) plan. According to the South China Morning Post, the company is planning to raise approximately $1 billion through the listing of its Macau property.
MGM Grand Macao, a joint venture between MGM Mirage and Pansy Ho, the daughter of Macau casino magnate Stanley Ho, is looking out for banks for this IPO.
Macau has become an attractive destination for casino companies. MGM follows casino operators such as Las Vegas Sands (LVS) and Wynn Resorts (WYNN), both of whom have accomplished IPOs of their Macau properties in 2009 and are investing billions in expansion there. Wynn Resorts raised $1.63 billion in October last year through the Hong Kong listing of its Macao unit. In November, Las Vegas Sands’ Sands China raised $2.5 billion in its IPO.
Macau is the only Chinese city where gambling is legal. It has survived the economic downturn relatively well, generating HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008. This is more than double the revenue generated by the Las Vegas strip. In Oct. 2009, Macau casino revenues were a record high $1.6 billion, up 42% from the year-ago quarter.
Friendly gaming policies from the local government and a slackening of visa restrictions by Beijing to allow more mainland tourists to visit Macau have helped the gaming industry in Macau to achieve record earnings.
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