MGM Resorts to own majority of Macau IPO

A date hasn't yet been set for the offering but is expected in May. The IPO could raise around US$ 1 billion, a person familiar with the situation said earlier this month.

MGM Resorts has benefited from its joint venture with the daughter of local kingpin Stanley Ho as revenue in Las Vegas remains sluggish. Macau overtook the Las Vegas Strip as the world's biggest gambling market in 2006 and last year raked in about four times the Strip's revenue.

Under the deal, MGM Resorts will have 51% ownership of MGM China Holdings after its IPO on the Hong Kong Stock Exchange, according to MGM Resorts International. Ho will retain a 29% interest in the public company, with the remainder sold to the public.

In exchange, Ho will buy US$ 300 million of MGM Resort's convertible senior notes on terms similar to its existing 4.25% convertible senior notes due 2015, it said.

Proceeds from the offering will go to a Ho-controlled entity and help fund her purchase of MGM Resort's notes. MGM Resorts will receive net proceeds from the debt sale but not from the IPO, it said.

MGM China, which operates the MGM casino in Macau, will seek listing approval from the Hong Kong exchange's listing committee in April, the person said earlier this month.

MGM has lagged U.S. rivals Wynn and Sands in terms of market share in Macau but has been increasing its share of the pie in recent months. Some competitors have accused the operator of buying business by paying higher commission rates to the middlemen who bring high rollers to Macau casinos, but the company has attributed the recently better market share to a genuine business improvement.

It is awaiting land rights to build another property in the territory's Cotai area, home to Las Vegas Sands' Venetian, the world's largest casino. Galaxy is set to open a US$1.9 billion casino-resort there on May 15, while Sands, Wynn and SJM also have plans to expand there.