DEALTALK-Amid hurdles, MGM pushes on with HK IPO
* MGM could raise up to $500 mln in HK IPO by Q2 2010
* But concerns about Pansy Ho joint venture are an overhang
* Valuations could be cheaper than Sands China and Wynn Macau (For more Reuters DEALTALKs, click [DEALTALK/]
By Sui-Lee Wee and Kennix Chim
HONG KONG, Jan 15 (Reuters) - Like its fellow Las Vegas peers before it, casino company MGM Mirage (MGM.N: Cotización) is pushing ahead with plans to list its Macau operations on the Hong Kong stock exchange, hoping to raise up to $500 million as early as the second quarter of this year.
If the initial public offering goes ahead, MGM, whose largest shareholder is billionaire Kirk Kerkorian, would be the third U.S. casino marquee name since November to float its Macau operations on the Hong Kong stock exchange.
But achieving a high valuation for its IPO may be tough amid lingering concerns about its 50-50 joint venture partnership in Macau and lack of expansion plans in the enclave, the world's largest and fastest-growing gambling market located an hour away by ferry from Hong Kong.
"Wynn and Sands were priced at 13 times (EV/EBITDA) multiples and MGM is a relatively weaker player, so the market would probably put a discount on it at 11.5 times," said Gabriel Chan, a gaming analyst with Credit Suisse.
"The Pansy Ho-MGM partnership is always an overhang," he said. "Obviously if they don't come up with new development plans, by default, their market share could go down." Continuación...