American casino operator MGM Resorts International has spent around $325 million in order to acquire an additional 5% stake in its MGM China Holdings Limited subsidiary from Hong Kong entrepreneur Pansy Ho.
According to a report from the Bloomberg news service, the agreement has seen MGM Resorts International increase its total shareholding in MGM China Holdings Limited to 56% while Ho’s holding company is to receive $100 million in cash alongside approximately $175 million in stock and $50 million in deferred payments in lieu of the dividends.
Ho is the daughter of gambling mogul Stanley Ho Hung Sun and she has partnered with MGM Resorts International for over a decade while continuing to diversify her holdings beyond China. The agreed deal will additionally allow her acquire four million shares from Tracinda Corporation, which was run by billionaire Kirk Kerkorian until his death last year, at $25 apiece to give the 53-year-old a potential 4.8% stake in MGM International resorts.
Established as a 50/50 venture in 2007, MGM China Holdings Limited is responsible for the MGM Macau Grand Casino Resort alongside the soon-to-open MGM Cotai Casino Resort. Ho ceded joint control of the Macau casino operator in 2011 by selling a 1% stake to MGM Resorts International before offering another portion of her shareholding via a public sale that raised $1.5 billion while this latest deal takes the former television presenter’s stake in MGM China Holdings Limited to 22%.
“I believe in the long-term future of Macau and I think that owning more of MGM China [Holdings Limited] over time is going to be a very accretive transaction for the MGM Resorts International shareholder,” Jim Murren, Chairman and Chief Executive Officer for Las Vegas-based MGM Resorts International, told Bloomberg. “I think that I have to do it incrementally. Going back to doing deals, you need to have a buyer and a seller. In the case of the seller, Pansy Ho, I have been trying to work a deal with her for many, many quarters. This was a relatively small deal but it’s large in the sense of directionally it signals the fact that MGM Resorts International wants to own more of MGM China [Holdings Limited], it believes in the long-term growth [of MGM China Holdings Limited] and I think that it is going to have to be done in bite-sized pieces as opposed to owning a lot straightaway.”