Macau's MGM China gets boost from billionaire investors

Las Vegas gaming magnate Kirk Kerkorian is investing us$ 50 million through his private holding company, Trancinda Corp. The nonagenarian and founder stepped down from MGM Resorts' board in April but remains a senior adviser to the firm.

Hong Kong property tycoons Poon Jing of Asia Standard and Walter Kwok of Sun Hung Kai Properties are investing us$ 40 million and us$ 25 million each, said the sources, who asked not to be cited by name because details of the IPO are not yet public.

Gaming revenue in Macau, the world's largest gambling market, has soared with unabated demand from mainland visitors, flocking to the only place in China where casino gambling is legal. Revenues in the former Portuguese enclave reached us$ 10 billion in the first four months of the year, equalling Las Vegas's earnings for the whole of last year.

Macau's market was likely to remain a hit with investors, said analyst Victor Yip of UOB Kay Hian in Hong Kong. "It seems like the gaming sector is a really hot sector these days, as you can tell from the trading volume, and also from the share price performance of those listed plays," Yip added. "I am sure the IPO will show a good number of oversubscriptions."

The launch of Galaxy Entertainment Group's new us$ 2 billion casino earlier this week is likely to propel even stronger revenue growth, casino magnate Steve Wynn told reporters on Tuesday. Bank of America Merrill Lynch, JPMorgan Chase & Co and Morgan Stanley are acting as joint global coordinators for MGM China's offering.

Pansy Ho, daughter of Stanley Ho - dubbed Macau's casino king for his pervasive influence over the Macau gaming sector - will sell down her 50 percent existing stake to 29 percent in MGM China. MGM Resorts will hold 51 percent while the rest will be sold to the public.

MGM's links with Pansy have come under official scrutiny in the United States, with New Jersey's State Division of Gaming Enforcement declaring that Ho was an "unsuitable" associate due to its belief that her father has links to organized crime, prompting the firm to yield holdings in the state. A public legal spat, between Pansy, her 89-year-old father and members of the Ho family over the distribution of his multibillion assets had weighed on sentiment ahead of the listing in February.