Jefferies: MGM Hong Kong Offering A "Modestly Positive Indicator" For MGM Shares

According to a report released by Jefferies, there are various reports suggesting that MGM Resorts' (NYSE: MGM) subsidiary, MGM China Holdings Ltd, “will likely finalize its initial public offering on the Hong Kong exchange in May and raise about $1 billion.”

“The news comes shortly after the resolution of a family dispute between the company's joint venture partner, Pansy Ho, and her father, the leader of a Macau gambling empire, Stanley Ho,” Jefferies writes. “MGM China operates the MGM Grand in Macau and filed an A1 form back in September, but the IPO process has been ongoing as the company continues to drive stronger revenues and navigate the various uncertainties affecting the Macau gaming market over the last several months, including the Ho family's disputes.

“We view the news as a modestly positive indicator for MGM shares as it signals a more definitive timeline for the company's ability to harvest IPO proceeds and pay down debt. That said, we believe the shares will be primarily driven by the trajectory of improvement in the Las Vegas Strip market.”

MGM Resorts closed Monday at $13.26.