|By Howard Stutz, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
Jan. 24, 2010--MGM Mirage is laying the groundwork for an initial public offering on the Hong Kong Stock Exchange.
The listing could raise up to $1 billion and could hasten the casino operator's exit from the sagging Atlantic City gaming market.
In October, MGM Mirage Chairman and Chief Executive Officer Jim Murren said the company was exploring the benefits of a spot on the Hong Kong market by selling shares of its 50 percent-owned MGM Grand Macau.
The IPO would follow similar moves by Wynn Resorts Ltd. and Las Vegas Sands Corp., which raised $1.63 billion and $2.5 billion, respectively, on the Asian exchange.
Last week, Hong Kong media reported MGM Mirage was moving the IPO forward. A source close to the company said preliminary discussions were under way with banks that would oversee the public offering.
A move into the Asian market would also increase the company's involvement with Hong Kong businesswoman Pansy Ho, its joint-venture partner in Macau and the daughter of Macau casino kingpin Stanley Ho.
Herein lies the rub.
New Jersey gaming authorities want MGM Mirage to sever its ties with Pansy Ho because of her 88-year-old billionaire father's alleged connection to Chinese organized crime triads.
Nevada and Mississippi gaming regulators gave their approval to the relationship. New Jersey, however, wants to hold a public hearing on her suitability as a business partner. If she's rejected, MGM Mirage would be forced to sell either its Macau or Atlantic City assets.
The company has apparently already made a decision.
With a potentially lucrative Hong Kong IPO in the offing, sources said MGM Mirage is taking steps to exit Atlantic City, where it owns 50 percent of the Borgata and a 72-acre parcel near the resort in an area known as Renaissance Pointe.
In 2007, MGM Mirage said it would spend $5 billion to build MGM Grand Atlantic City on the vacant site. The project was scrapped when the economy tanked.
Analysts are perplexed why New Jersey is hostile to MGM Mirage. Atlantic City gaming revenues have nose-dived in the past 24 months. The market also faces more casino competition from Pennsylvania, Delaware and Maryland.
It's unclear whether Boyd Gaming Corp., which owns the other 50 percent of Borgata, will acquire MGM Mirage's stake. A buyer may be sought, but Boyd has right of first refusal.
With MGM Mirage apparently heading out door, add another nail into the Atlantic City coffin while chalking up another point for Macau.
Howard Stutz's Inside Gaming column appears Sundays. E-mail him at email@example.com or call 702-477-3871. He blogs at lvrj.com/blogs/stutz.
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