MGM may be looking to IPO a portion of its Macau operations.
Following on the fleet heels of WYNN and LVS, MGM may be looking at IPOing a portion of its Macau operations. We are unsure if Pansy Ho is involved. It probably makes sense to capitalize on the big multiples awarded Macau cash flow. Moreover, unlike those in the US, Macau cash flows are not depressed and may actually be benefitting from somewhat of a VIP bubble.
A Macau IPO could generate $120-180 million in gross proceeds to MGM using the following assumptions:
- 50% MGM ownership of MGM Macau
- IPO 25% of MGM Macau operations
- Long-term run rate of $150-175 million in EBITDA at MGM Macau
- 12-13x multiple
- Approximately $850 million in net debt at MGM Macau at 12/31/09
