U.S.-based casino operator MGM Resorts International says it closed on Thursday the acquisition of 188.1 million shares in subsidiary MGM China Holdings Ltd from minority shareholder Pansy Ho Chiu King (pictured). The deal was first announced on August 16.
Following the transaction, Ms Ho’s stake has been reduced to 22.49 percent, while MGM Resorts’ stake in MGM China increased to approximately 56 percent.
“Our increased stake in MGM China and enhanced relationship with Pansy both reinforce our belief in the long term prospects of Macau and the future success of MGM China, in which Pansy remains a significant shareholder and collaborative partner,” said Jim Murren, chairman and chief executive of MGM Resorts, in a press release.
“We remain focused on our strategic goals and believe we have taken another step to further position our company to generate sustainable value to our shareholders,” added Mr Murren.
As part of the agreement, MGM Resorts issued 7.06 million units of its common stock to Ms Ho and paid her a cash consideration of US$100 million. In addition, the U.S. firm will make a deferred cash payment to Ms Ho amounting to US$50 million over a period of not more than five years.
Ms Ho has separately entered into an agreement to acquire 4 million shares of MGM Resorts stock at US$25.00 per share from Tracinda Corp, founded by the late Kirk Kerkorian, who was a long-term MGM Resorts investor.
With the completion of these transactions, Ms Ho now owns a stake of approximately 4.8 percent in MGM Resorts, according to regulatory filings.
Mr Murren had said in an interview with Bloomberg Television last month that MGM Resorts might be willing to buy even more shares of MGM China. “I believe in the long-term future of Macau and I think owning more of MGM China over time is going to be a very accretive transaction for the MGM Resorts shareholders,” he said.
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Cameron McKnight and Robert Shore
Analysts at Wells Fargo Securities