DealZone

Deals wrap: MGM China IPO may be a gamble for investors

Macau casino operator MGM China, co-owned in part by casino mogul Stanley Ho’s daughter Pansy Ho, raised $1.5 billion from its Hong Kong initial public offering after pricing it at the top of its indicative range, triggering some concerns about lofty valuations.

Gambling revenues in the world’s largest gaming market are at record highs, dwarfing those of Las Vegas and fueling a surge in share prices of local casino operators that boosted demand for MGM China’s IPO.

But the rally may have pushed stock prices in the sector too far, reducing their appeal to some investors according to some analysts.

However, shares of Macau’s biggest casino operator SJM Holdings, which has nearly three times the revenue of MGM China, have surged nearly 52 percent so far this year. If MGM China can duplicate the success of SJM, the fears about high valuations should subside.

With the deal Pansy Ho is now worth nearly $2 billion more than her legendary casino father “king” Stanley.

Deals wrap: Treasury sells stake of AIG

The Treasury made a small profit when it sold a portion of its shares in AIG, but it was unclear how its investment in the beleaguered insurer will ultimately fare.

Tuesday’s $8.7 billion stock offering, (being dubbed by some as AIG’s re-IPO) which included 200 million shares sold by the Treasury and 100 million sold by AIG itself, is far smaller than the $10 billion to $20 billion deal some banking sources had suggested earlier this year, hinting at a potential lack of investor interest.

With the sale, the Treasury has raised $5.8 billion of the $47.5 billion it needs to break even and now has another 1.5 billion shares to sell.

Deals wrap: Glencore disappoints while Yandex confirms price

Even though sources close to Glencore felt the commodities trader had left “money on the table” with an offer price of 530 pence that valued the company at $59.15 billion, the company’s shares were stuck under water on their first day of official trade, dashing hopes of a strong start.

While some analysts still expressed concern over Glencore’s valuation, several analysts and bankers brushed aside worries about the stock trading below the offer price. They said the market debut should be seen as a success given its size and the continued uncertainty in both commodity and equity markets.

In other news Yandex’s initial public offering, the Internet sector’s biggest U.S. float since Google, was 17 times oversubscribed, a source said, with demand boosted by a blow-out float of LinkedIn.