Jefferies Comments On MGM / Pansy Ho Restructuring

Before the open on April 13, MGM Resorts International MGM announced that it has “restructured its Macau joint venture with Pansy Ho whereby MGM will retain a 51% interest and management control, Pansy Ho will retain a 29% interest, and the remaining 20% will be publicly traded in Hong Kong at the completion of its IPO,” Jefferies reports. “Using a portion of the IPO proceeds, Pansy Ho will purchase $300M of 4.25% convertible senior notes due 2015 similar to those presently on MGM's balance sheet,” Jefferies writes. “These notes will have a conversion price of $18.58 per share and represent 53.83 shares of MGM per $1,000. “We view the proposed restructuring of MGM's Macau partnership with Pansy Ho as a positive for MGM shares, given that MGM maintains a majority ownership in its most valuable asset and is able to generate cash in Las Vegas through Pansy Ho's investment in the company. We expect the shares to trade higher on the news.” MGM closed Wednesday at $13.70.