We have to admire the Macau Daily Times sometimes: it knows how to write up a controversial story better than anyone we know. Today’s article about MGM Macau is a case in point. The first few paragraphs go into detail about an announcement to the stock exchange that the company had identified a piece of land in Cotai it would like to develop, without saying where it is. The report provides no speculation from analysts about how this project is going to be financed, when every last dollar of the proceeds from the pending IPO for MGM China is going into the pocket of one of its shareholders. There is also no mention of the fact that MGM is easily last in the queue for labor quotas and table allocations out there, behind Lot 5&6, Wynn, Equestrian Theme Park, and SJM 2, yet its concession expires two years before Sands’ and Wynn’s do (2020). Why is none of this included by the reporter? Because you don’t need to add all these details in order to write a fair, balanced story. Indeed, we tip our hat to MDT for its sensibility.
But then, perhaps just to be be a bit more risque, the second part of the story begins with a sub-headline, “New investigations”. It goes on to point out that the same SFC filing from MGM also happens to mention that wait for it the company has signed a non-compete agreement with Pansy Ho that wait for it allows her to continue serving on the board of the company’s competitor, STDM (parent of SJM). Apparently, she will step out of the room whenever any subject comes up that could affect her interests in MGM.
Oh, wait, hang on, it doesn’t say that. It says she “does not intend to participate in STDM board decisions which concern her competing interests”. So, unless we have got this completely wrong, this means she can listen in to what’s being discussed, she just will restrain herself from voting on it. Phew. If we were being offered shares in the MGM China IPO, we would be mightily relieved to learn that they had forced her to sign this terribly restrictive contract.
Anyway, back to the real subject of that sub-headline. The very last line of the article says this: Gaming authorities in Mississippi and Michigan have stated that they are reviewing MGM Resort Internationals [MGM China’s major shareholder] association with Pansy Ho and the gaming authority in Illinois has opened an investigation into this association.
Now, we are sure there’s nothing to worry about with this, and we can understand why the newspaper put it at the end. After all, Nevada found Pansy suitable to be partnering with MGM, despite the fact that New Jersey did not. And if Michigan and Mississippi think there is a problem with her being too close to her father, well, we can always just send them a tape of her appearances with him recently on television in Hong Kong to dispel any such notions.
Enough said. Good luck with the IPO, Pansy. We hope you get 20X Ebitda. Used with permission & copyright to IntelMacau.com