MGM Mirage is pursuing an initial public offering in Hong Kong that could generate between US$300 million and US$500 million from the sale of a 20% to 30% stake. A launch date for the IPO has not yet been set.
The news appears in a research note issued Tuesday by Oppenheimer & Co. hospitality analyst David Katz. “Management indicated it is pursuing an HK IPO, with which its JV is in support. The company also expects to generate $300-$500M for MGM from the sale of a 20%-30% stake, which implies a relatively high multiple compared with other deals’. We view this as a less significant catalyst than MGM’s domestic issues.”
Katz reports that a further equity offering is unlikely in the near term for MGM Mirage, “as the availability of additional unsecured debt and prospective operating improvement should be adequate.” MGM stock will continue feeling pressure due to ongoing capital obligations, he adds.
In this video interview during Las Vegas CityCenter’s opening celebration earlier this month, MGM Mirage CEO James Murren discussed the company’s US$8.5 billion venture and aVegas recovery that he believes is already under way.