Pansy Ho eyes $1.5B IPO after spinoff of MGM Macau

May 16, 2011 8:00 PM

Pansy Ho, who continues to operate businesses for her billionaire father Stanley Ho, will retain her positions as a director and shareholder of STDM, her father’s Hong Kong-based company that operates some 20 casinos in Macau.

She also will soon become a billionaire in her own right.

That was made clear last week with the filing of an application for the 20 percent spinoff of MGM Macau, the casino that has been operating as a 50/50 partnership between MGM and Pansy Ho. The papers included a non-compete agreement that permits Ho to continue with her current STDM holdings.

On Monday, it was revealed Ho is seeking $1.5 billion for the 760 million shares of MGM China stock she is making available for the Hong Kong initial public offering (IPO). Sources told Bloomberg News, the shares would be priced at HK$12.36 to HK$15.34 or $1.545 to $1.92 each.

In addition, Ho will sell another one percent to MGM Resorts International (MGM) to give the company an operating majority for the Macau facility. She also plans to buy $300 million worth of MGM debt and will retain a 29 percent stake in the Macau operation.

Explaining the continuing relationship with Ho, MGM wrote, "If Pansy Ho were to reduce her involvement in our company, we may no longer be able to benefit from her extensive relationships and business knowledge and experience."

It was that close relationship that caused gaming regulators in New Jersey to force MGM Resorts International to sell their half-interest in the Borgata, saying Ho was unsuitable for licensing because of her involvement with her father’s businesses. For years, 89-year-old Stanley Ho was alleged to have links to the Chinese underworld.

In the paperwork filed with the Hong Kong Stock Exchange, MGM Macau said it had submitted an application to the Macau government to lease a parcel of land on the Cotai Strip for development. The property was described as being about 17.8 acres in size but its location was not identified.

"Our management’s experience, disciplined approach to development and prudent capital management put us in a strong position to evaluate Macau’s evolving gaming market and selectively take advantage of opportunities in Cotai," MGM said.

However, analysts noted that the size of the Cotai property is about a third the size of a plot targeted by Wynn Macau for his next casino.