UPDATE 1-MGM Resorts files to list Macau venture, stock up | Reuters


UPDATE 1-MGM Resorts files to list Macau venture, stock up

Mon Sep 27, 2010 3:09pm EDT

* Goldman estimates proceeds in excess of $300 mln
* MGM shares rise over 7 percent (Adds analyst comment, share movement)
HONG KONG/LOS ANGELES, Sept 27 (Reuters) - MGM Resorts International (MGM.N) said its joint venture in the booming Asian enclave of Macau, MGM China, has filed for an anticipated initial public offering in Hong Kong, sending its shares up 7.5 percent on Monday.
The Las Vegas-based casino operator, in a filing with the U.S. Securities and Exchange Commission, gave no details of the timing or terms of the proposed IPO.
Filings are typically followed by a listing hearing in Hong Kong within four to six weeks, although times can vary.
MGM Chief Executive Jim Murren said in August that the company expected to take the unit public in Hong Kong sometime later in 2010 -- ideally after the venture had cleared the way for a second Macau property.
MGM operates its sole Macau casino as a 50-50 joint venture with Pansy Ho, daughter of Macau gambling tycoon Stanley Ho.
Goldman Sachs analyst Steve Kent estimated on Monday that an offering could generate proceeds of more than $300 million.
"We view an IPO of MGM Macau as an important liquidity event for MGM and, while not unexpected, we think today's filing is a positive step forward for MGM's shares," Kent said in a research note.
Despite a heavy debt load, MGM has been able to maneuver through the recent financial crisis, but it will have additional billions in debt coming due over the next few years and management has vowed to reduce the company's leverage.
An MGM listing would follow Hong Kong IPOs by affiliates of U.S.-based rivals Wynn Resorts Ltd (WYNN.O) and Las Vegas Sands Corp (LVS.N), which spun off their Macau assets last year to form Hong Kong-listed Wynn Macau Ltd (1128.HK) and Sands China Ltd (1928.HK), respectively.
Macau's other three casino operators are SJM Holdings (0880.HK), Galaxy Entertainment Group Ltd (0027.HK) and Melco Crown Entertainment Ltd (MPEL.O).
BNP Paribas (BNPP.PA), Bank of America-Merrill Lynch (BAC.N), JP Morgan (JPM.N) and Morgan Stanley (MS.N) have won the mandate for the long-awaited deal, sources told Reuters earlier.
The IPO would make the MGM Macau casino the last of Macau's six gambling licensees to go public.
Shares of MGM Mirage were up 80 cents at $11.47 in afternoon trading on the New York Stock Exchange. (Reporting by Doug Young, Kennix Chim and Deena Beasley; Editing by David Cowell and Gerald E. McCormick)

NOW AT: 12.98

US Stock Futures Up On Intel, JPM Morgan Earnings; DJIA Up 72 -

MGM Resorts International disclosed plans for it and the casino company's largest shareholder to sell at least 68.7 million shares as it predicted a smaller core third-quarter loss than Wall Street was expecting. Shares dropped 4.6% to $12.98 in premarket trading as the casino operator said it will sell at least 40.9 million shares while Tracinda Corp. offers a minimum 27.8 million. There are some 441 million shares outstanding.


MGM Resorts sees stock slide for a second day - Las Vegas Sun

MGM Resorts sees stock slide for a second day

By Steve Green (contact)
Thursday, Oct. 14, 2010 | 5:28 p.m.

MGM Resorts International's stock fell again Thursday in heavy trading even as two debt-rating agencies applauded moves by the Las Vegas company to cut debt by issuing more stock to the public.
MGM Resorts stock closed Thursday at $11.56, down 4.46 percent. That followed Wednesday's 8.2 percent decline in reaction to news that the company intended to raise more than $500 million with a stock offering; as well as preliminary third quarter results.
Some 51.1 million MGM Resorts shares traded Thursday, making it one of the 10 most heavily-traded stocks on the New York Stock Exchange.
Also, Fitch Ratings assigned MGM Resorts a positive rating outlook. Its last rating report on June 29 didn't include an Issuer Default Rating outlook.
On Thursday, Fitch analysts said "the significant refinancing and capital raising efforts by MGM over the last 18 months have better positioned the company to survive its liquidity crunch and create a more sustainable capital structure."
Standard & Poor's Ratings Services, in the meantime, revised its rating outlook on MGM Resorts to stable from developing.
"The revision of the rating outlook to stable reflects some near-term improvement to MGM's still-weak liquidity profile following the recent pricing of a primary common stock offering, which will generate net proceeds in excess of $500 million," Standard & Poor's credit analyst Ben Bubeck said in a statement. "In addition, management continues to make progress toward other liquidity-enhancing transactions, including the sale of MGM's 50 percent ownership in Borgata Hotel Casino & Spa and related land, as well as an IPO of its Macau assets, which have the potential to further bolster liquidity in coming quarters ahead of significant debt maturities in 2011 and 2012."
On the downside, Standard & Poor's said: "The revision of the rating outlook to stable also reflects our assessment that rating upside potential no longer seems likely over the foreseeable future. While visitation trends to the Las Vegas Strip are improving and room rates are showing some resilience, continued depressed levels of spend per customer have driven weaker performance this year than the approximately 10 percent decline in EBITDA we previously incorporated into the rating for 2010."
EBITDA is a profitability measure meaning earnings before interest, taxes, depreciation and amortization.
"Following a decline in Strip property EBITDA of 22 percent during the first six months of 2010, the company recently announced preliminary results for the third quarter, which included a 16 percent decline in Strip property EBITDA. Given our economists' current expectation for only modest (2.2 percent) growth in consumer spending in 2011, as well as continued high unemployment, a substantial rebound in EBITDA generation next year seems unlikely, notwithstanding improving trends in group bookings," the agency said.

Thursday NOV 18:

MGM Resorts International (NYSE:MGM) soared over 2.03% and closed at $12.06.The stock hit an intra day high of $12.30 and low of $12.01. So far this year, the stock is up over 32%. The 52-week range for the stock is $8.92 and $16.66.