HONG KONG (
is moving forward with its Hong Kong initial public offering, and is currently in the process of looking for investment bankers to work on the offering, according to reports.
The casino giant is looking to raise up to $1 billion in the deal of its MGM Grand Macao,
The South China Morning Post
reported. Other outlets are forecasting the offering will raise just $500,000 million and could occur as earlier as the second quarter.
were cited by
as possible banks that could underwrite the IPO.
MGM is following the lead of rivals
Las Vegas Sands
, which completed IPOs of their Macau units in 2009.
Wynn raked in $1.63 billion back in October, while Sands raised $2.5 billion in November. But on its first day of trading, Sands China tumbled 10%, as investors feared the company's high valuation, increasing competition in the area and uncertain outlook for Macau travel restrictions.
Such fears, of course, could also seep their way into the MGM deal, which could be why shares of the company are falling 3% in midday trading to $12.01.
MGM's stock has been undervalued over the past year compared with Sands and Wynn. In 2009, shares of MGM fell 41%, while Sands' soared 110% and Wynn grew 23%.
This is predominantly due to MGM's high reliance on the Las Vegas strip, which was significantly hurt amid the recession. The opening of its massive CityCenter development in December raised fears that Las Vegas supply is outpacing demand.
MGM's growth in Macau could relieve some of this pressure.
-- Reported by Jeanine Poggi in New York.
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