MGM To Buy Added 4.95% Stake In MGM China

MGM Resorts International MGM reached a definitive deal to buy 188.1 million shares of its subsidiary MGM China Holdings Limited from Grand Paradise Macau (GPM). As a result of the 4.95 percent acquisition, the company's stake in Chinese subsidiary would increase to about 56 percent. The company expects the transaction to close in the third quarter.

MGM said that as part of the deal, it would issue GPM or its nominee 7.06 million of its shares and pay $100 million as cash consideration. Aside from these, the company would also make a deferred cash payment of $50 million over time that is equivalent to the dividend received on such shares. The final payment would be made on the fifth anniversary of the closing of the transaction in the event of any amount remaining unpaid.

The company also indicated it reached an agreement with Pansy Ho, who controlled GPM, allowing her to buy four million shares at $25.00 a piece from Tracinda Corporation. Once the transaction is completed, Ho's stake in MGM would be about 4.8 percent.

MGM Resorts' Chairman and CEO, Jim Murren, said, "MGM Resorts is committed to the long term growth of Macau as a premier international tourism destination and we are pleased that we can build upon our longstanding relationship with Pansy to further work toward our mutual interests."

On Monday, MGM gained $0.34, or 1.39 percent, to $24.84.