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Pansy Ho plays winning hand in $1.5 billion MGM China IPO
May 27, 2011 / 8:35 AM / 6 years ago

Pansy Ho plays winning hand in $1.5 billion MGM China IPO

<p>Chairperson and Executive Director Pansy Ho poses at the start of an MGM China news conference ahead of its IPO in Hong Kong May 19, 2011. REUTERS/Bobby Yip</p>

HONG KONG (Reuters) - The IPO of MGM China will make it the latest U.S. casino affiliate to go public in Hong Kong and make Pansy Ho, daughter of Macau’s legendary casino magnate, worth $5 billion on paper.

By selling part of her stake in the Macau casino venture through the upcoming IPO, Ho will claim the crown of Hong Kong’s wealthiest woman, earning more than 18 times an initial investment of around $80 million in 2005.

She will eclipse the riches of even her father, Macau’s legendary casino “king” Stanley Ho, whose estimated $3.1 billion fortune recently sparked a prolonged and public legal battle among his wives and offspring.

Pansy, once dubbed “party girl Pansy” by local tabloids for her relationships with canto-pop stars and wealthy socialites, will be worth nearly $2 billion more than her father after the listing, factoring in her retained 29 percent stake in MGM and other assets.

Petite with black, cropped hair, the 48 year old divorcee said she will play a key role in driving MGM China’s strategy, despite nearly halving her share holdings.

“I believe to be an MVP, most valuable player, like when you are in a ball game you do not always have to be the one making the goals. You would like to be there to be the best assistant,” the Santa Clara University graduate told a news conference last week in a question about why she cut her holdings.

Her participation in the business is seen by analysts as critical for MGM to continue operating in the former Portuguese enclave, the world’s biggest gambling destination located on the Southern tip of China and an hour away by ferry from Hong Kong.

The U.S. operator has flagged her potential exit from the joint venture as a key investment risk, due to her extensive government and regulatory contacts -- though analysts say she’s not going anywhere soon. .

Analysts say the risk that Pansy will withdraw completely after reducing her MGM China stake, to control her father’s flagship casino operator SJM (0880.HK) -- the largest player in Macau -- is minimal.

“It is a massive return on investment for her so from that perspective alone it probably makes a lot of sense,” said an analyst involved in the MGM listing.

After taking the reins at Shun Tak Holdings (0242.HK), a property and transport conglomerate, in her early thirties, Pansy was seen as the natural heir to her father’s gambling empire, overshadowing her siblings in leadership and business acumen.

An avid art lover and a member of CPPCC, an advisory body to China’s parliament, Pansy is one of 17 children fathered by the 89 year old casino mogul.

”Pansy is very experienced in managing a large corporation, also her roots are in Macau so that is definitely an asset to MGM,“ said Donald Cheng, an analyst at Haitong International Research.”

FAMILY BAGGAGE

MGM Resorts’ relationship with Pansy has not been without speed bumps.

New Jersey regulators deemed Pansy, chairwoman and executive director of MGM China, an “unsuitable” partner for MGM’s Macau venture due to concerns her father had links to organized crime. In response MGM divested its holdings in New Jersey last year.

“We are incredibly proud to be partners with Pansy Ho. I am proud that we are very good friends and trusted business partners,” said Jim Murren, co-chairman and executive director of MGM China.

Pansy has also had some bumpy personal relationships.

She married Julian Hui, son of Hong Kong shipping magnate Hui Sai-fun in 1991 but divorced nine years later.

The eldest of five children from Stanley Ho’s second wife, Pansy was one of the main players in a dynastic legal tussle that erupted in January over a stake in the octogenarian’s multi-billion dollar empire and control of SJM.

The bitter public row, played out on YouTube, local television and splashed across international publications, lasted nearly 2 months.

MGM has agreed that Pansy will remain a director at Sociedade de Turismoe Diversoes de Macau SA (STDM), the holding firm which controls SJM’s parent, STDM - Investments Ltd, and retain a nominal stake of 3.8 percent. She has maintained that she does not intend to participate in board decisions of STDM.

RIDING THE MACAU BOOM

MGM China, has a market share of around 11 percent in Macau -- the world’s largest gaming market -- compared to about 30 percent held by SJM.

Despite surging revenue growth, competition remains fierce among the six licensed operators which include U.S. rivals Las Vegas Sands (LVS.N) unit Sands China (1928.HK) and Wynn Resorts (WYNN.O) subsidiary Wynn Macau (1128.HK).

MGM’s 35-story tower on Macau’s glitzy peninsula must also woo customers from dominant operator SJM, run by Stanley Ho’s fourth wife Angela Leong, Melco Crown Entertainment MPEL.O, run by Pansy’s brother, Lawrence Ho, and Galaxy Entertainment (0027.HK).

“You read about her party antics when she was younger. Now you meet her and she comes across as a really experienced businesswoman,” said one of her business associates. “You can see she is the one in charge.”

Editing by Charlie Zhu and Michael Flaherty

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