KUALA LUMPUR: MGM Mirage Inc, a global casino operator, has held discussions with Genting group on the latter’s possible participation in its Macau operations, as part of their overall talks towards forming a “very powerful” global alliance.
In an email reply to queries from The Edge Financial Daily, MGM public affairs senior vice-president Alan M Feldman said: “We have had specific discussions about Macau but would not rule out Genting’s participation if it made strategic sense for all parties.” Other than Macau, he said the two parties had started discussions on possible marketing relationships, strategic ventures and partnerships globally.
“While discussions between the companies are at a preliminary stage, we have started to consider possible marketing relationships, strategic ventures and partnerships with Genting globally,” he said. Feldman was asked to comment on intense speculation that Genting group, which is also building a casino resort in Singapore, may be buying over MGM’s interest in Macau.
“A relationship with Genting makes strategic sense as both companies have similar operating philosophies. This has great potential to be a very powerful alliance,” he said. MGM, which is listed on the New York Stock Exchange, owns and operates 16 properties in the US. It also has 50% interests in four other properties in Nevada, New Jersey and Illinois in the US, and in Macau.
For the financial year ended Dec 31, 2008, MGM group recorded net revenues of about US$7.2 billion (RM25.2 billion). MGM Grand Macau is a 35-storey, 600-room casino resort, which opened on Dec 18, 2007. The property is owned and operated with its 50% joint venture partner, Pansy Ho, the daughter of Macau casino king Stanley Ho. The Edge weekly in its latest issue reported that unlike the cash-rich Genting group, MGM was on the brink of bankruptcy due mainly to a US$14.4 billion debt burden.
It also ran into problems at its CityCentre project in Las Vegas, a partnership with Dubai World, leading to cost overruns. The report said MGM’s prospects were turning for the better after a fund-raising exercise that would allow it to redeem about US$1 billion in bond papers expiring later this year. Genting’s recent RM349.5 million (US$100 million) acquisition of a 3.2% equity stake in MGM added fuel to the speculation that the cash-rich Genting group was weaving its plan to venture into Macau.
The stake was offered under a US$1 billion equity placement by MGM last month. Also last month, Genting Bhd and its unit Resorts World Bhd completed the subscription of a total of US$100 million worth of senior secured notes issued by MGM.
In an email reply to queries from The Edge Financial Daily, MGM public affairs senior vice-president Alan M Feldman said: “We have had specific discussions about Macau but would not rule out Genting’s participation if it made strategic sense for all parties.” Other than Macau, he said the two parties had started discussions on possible marketing relationships, strategic ventures and partnerships globally.“While discussions between the companies are at a preliminary stage, we have started to consider possible marketing relationships, strategic ventures and partnerships with Genting globally,” he said. Feldman was asked to comment on intense speculation that Genting group, which is also building a casino resort in Singapore, may be buying over MGM’s interest in Macau.
“A relationship with Genting makes strategic sense as both companies have similar operating philosophies. This has great potential to be a very powerful alliance,” he said. MGM, which is listed on the New York Stock Exchange, owns and operates 16 properties in the US. It also has 50% interests in four other properties in Nevada, New Jersey and Illinois in the US, and in Macau.
For the financial year ended Dec 31, 2008, MGM group recorded net revenues of about US$7.2 billion (RM25.2 billion). MGM Grand Macau is a 35-storey, 600-room casino resort, which opened on Dec 18, 2007. The property is owned and operated with its 50% joint venture partner, Pansy Ho, the daughter of Macau casino king Stanley Ho. The Edge weekly in its latest issue reported that unlike the cash-rich Genting group, MGM was on the brink of bankruptcy due mainly to a US$14.4 billion debt burden.
It also ran into problems at its CityCentre project in Las Vegas, a partnership with Dubai World, leading to cost overruns. The report said MGM’s prospects were turning for the better after a fund-raising exercise that would allow it to redeem about US$1 billion in bond papers expiring later this year. Genting’s recent RM349.5 million (US$100 million) acquisition of a 3.2% equity stake in MGM added fuel to the speculation that the cash-rich Genting group was weaving its plan to venture into Macau.
The stake was offered under a US$1 billion equity placement by MGM last month. Also last month, Genting Bhd and its unit Resorts World Bhd completed the subscription of a total of US$100 million worth of senior secured notes issued by MGM. The notes were part of MGM’s US$1.5 billion fund-raising exercise to help settle its outstanding debts and for general corporate purposes, and were secured by a first-priority lien on substantially all of the assets of the Bellagio Hotel and Casino and the Mirage Hotel and Casino, both located in Las Vegas.
Following that, analysts had speculated that those investments could pave the way for Genting group to acquire a stake in MGM or take over the US casino operator’s investment in MGM Grand Macau.In response to The Edge weekly story, Genting said the group was constantly reviewing and evaluating business and investment opportunities that may arise in the gaming industry, refusing to comment on such speculation.
In the email reply to The Edge Financial Daily, Feldman did not say whether its MGM Grand Macau partner, Pansy Ho, would be agreeable to any equity participation by Genting in the Macau unit. He also did not comment on the New Jersey gaming law enforcement authorities’ call for MGM to cut ties with Ho due to allegations that her father was tied to organised crime.
Interestingly, in earlier reports MGM Macau defended Pansy Ho and disagreed with the authorities’ recommendation that she was an “unsuitable” business partner. It was reported earlier this month that the gaming giant would challenge the regulatory report. It is understood that the final ruling against MGM could force the Las Vegas-based casino giant to choose between abandoning the lucrative gaming market of Macau or walking away from its investment in Atlantic City, New Jersey, where it owns half the Borgata Hotel Casino & Spa, the city’s highest grossing casino.
When contacted by The Edge Financial Daily last week, Genting’s head of strategic investments and corporate affairs Justin Leong declined to comment on Genting’s purchase of the MGM stake and the speculated Macau venture.
Following that, analysts had speculated that those investments could pave the way for Genting group to acquire a stake in MGM or take over the US casino operator’s investment in MGM Grand Macau.In response to The Edge weekly story, Genting said the group was constantly reviewing and evaluating business and investment opportunities that may arise in the gaming industry, refusing to comment on such speculation.
In the email reply to The Edge Financial Daily, Feldman did not say whether its MGM Grand Macau partner, Pansy Ho, would be agreeable to any equity participation by Genting in the Macau unit. He also did not comment on the New Jersey gaming law enforcement authorities’ call for MGM to cut ties with Ho due to allegations that her father was tied to organised crime.
Interestingly, in earlier reports MGM Macau defended Pansy Ho and disagreed with the authorities’ recommendation that she was an “unsuitable” business partner. It was reported earlier this month that the gaming giant would challenge the regulatory report. It is understood that the final ruling against MGM could force the Las Vegas-based casino giant to choose between abandoning the lucrative gaming market of Macau or walking away from its investment in Atlantic City, New Jersey, where it owns half the Borgata Hotel Casino & Spa, the city’s highest grossing casino.
When contacted by The Edge Financial Daily last week, Genting’s head of strategic investments and corporate affairs Justin Leong declined to comment on Genting’s purchase of the MGM stake and the speculated Macau venture.
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