MGM Resorts International board of directors has answered the requirement of an investor to sell a part of its MGM China property.
Macau.- The MGM Resorts International board of directors has underlined its “commitment” to Macau after its largest stakeholder demanded a sale of 20 per cent of MGM China’s shares.
The company received a letter from Snow Lake Capital Limited, an Asian investment management firm, urging it to sell 20 per cent of local gaming concessionaire MGM China to a Chinese company as a strategic investor.
Snow Lake Capital owns 285.4 million common shares of MGM China Holdings Limited, approximately 7.5 per cent of the outstanding shares making it the largest public shareholder of MGM China.
In its letter, Snow Lake Capital said: “We have been long-term investors in the Macau gaming industry. We think it is in MGM Resorts International’s best interest to introduce a leading Chinese consumer internet or travel and leisure company as a 20 per cent strategic shareholder in MGM China.
“As discussed previously with MGM Resorts International Chief Executive Officer, William Hornbuckle, we believe such a transaction will create a win-win transaction for all parties involved and deliver significant shareholder value to both companies.”
The investor has presented some “suitable candidates” which it believes could complement MGM China in diversifying to non-gaming, including Chinese travel and internet platforms such as Meituan and Trip.com, leading Chinese hotel chains such as Huazhu Group, or culture and tourism project operators such as Sunac China.
In its response to the letter, the MGM Resorts board of directors stated that it “appreciates continued constructive engagement with MGM China shareholders.”
MGM Chinas’ total revenue in the first nine months of 2020 stood at HK$2.73bn, down by 83.9 per cent year-on-year as the pandemic disrupted the local gaming sector.