MGM Resorts International took its first steps toward an initial public offering on the Hong Kong Stock Exchange by filing a proposed listing application Monday.
The news sent shares of MGM Resorts soaring on the New York Stock Exchange after the company revealed its plans in a filing with the U.S. Securities and Exchange Commission.
One Wall Street analyst speculated that the casino operator, which owns 50 percent of the MGM Grand Macau and is reportedly eyeing a potential development on the Cotai Strip, could raise more than $300 million through the IPO.
"We view an IPO of MGM Macau as an important liquidity event for MGM and, while not unexpected, we think today's filing is a positive step forward for MGM's shares," Goldman Sachs gaming analyst Steve Kent told investors.
Hong Kong IPOs were lucrative for MGM Resorts' competitors in Macau last year. Las Vegas Sands Corp. raised $2.5 billion when it listed shares of its Macau holdings, while Wynn Resorts Ltd. raised $1.63 billion.
MGM Resorts Chairman Jim Murren has said on many occasions this year that the company was exploring a listing on the Hong Kong exchange and hoped the move could be accomplished by the end of the year.
Analysts believe MGM Resorts would use the money to help increase the company's presence in Macau, where gaming revenues have risen almost 70 percent this year. In recent earnings statements, company executives said the MGM Grand Macau has grown its market share and improved revenues.
MGM Resorts has some $13 billion in long-term debt as of June 30, but it was unclear whether any of the proceeds would go toward paying down the company's obligations.
In its SEC filing, MGM Resorts said MGM China Holdings Ltd., a Cayman Islands company, was formed by MGM Resorts and Hong Kong businesswoman Pansy Ho, the company's joint-venture partner in the MGM Grand Macau. The company said that if the proposed listing occurs, MGM China Holdings would control MGM Grand Macau.
"There have not been any decisions made regarding the timing or terms of any such listing or whether MGM China Holdings Limited will ultimately proceed with such a transaction or whether the proposed transaction will ultimately be approved by the Hong Kong Exchange," the company said in its SEC filing.
Shares of MGM Resorts closed at $11.25 Monday, up 58 cents, or 5.44 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.