The Genting Shadow Play

This was announced today (10 June 2009).

Gaming group Genting has paid US$100 million (RM350 million) for a 3.2 per cent stake in US casino operator MGM Mirage, an official from the US company said today.

The stake was offered under a US$1 billion equity placement by MGM Mirage last month.

"We take this as a sign of great confidence in our company," Alan Feldman, senior vice-president of public affairs for MGM Mirage told Reuters.

Last month, Kuala Lumpur-based Genting and its unit Resorts World had subscribed for a combined US$100 million worth of notes issued by MGM Mirage. The notes were part of MGM's US$1.5 billion fund-raising exercise to help settle its outstanding debts and for general corporate purposes.

Malaysian analysts had said the investments could pave the way for Genting to acquire a stake in MGM or take over the US casino operator's investment in MGM Grand Macau.

Genting, founded by the late tycoon Lim Goh Tong, is particularly keen to explore opportunities in Macao, where MGM Mirage has a 50-50 joint venture with Pansy Ho, the daughter of Stanley Ho, the Hong Kong gaming magnate.

MGM Mirage and Las Vegas Sands, which operate the world’s two largest casinos in Macao, have been struggling to reduce their debt burdens, inviting speculation that they could be tempted to raise cash by selling stakes.

Justin Leong, head of strategic investments and corporate affairs for Genting, said: “We are constantly looking to broaden our portfolio of strategic investments and strengthen partnerships around the world.”

Genting had been interested in potentially taking a stake in Pansy Ho’s US$1.25 billion joint-venture casino with MGM Mirage, the MGM Grand Macau.

And so the MGM notes are finally converted into shares of the MGM Mirage, putting Genting's shadow play once more into the lime-light. Will the main theatre of action be in Macau?

And what magic will they spin from now on for its shareholders since the AGMs of both Genting Berhad and Genting Malaysia are on 16th and 17th June?

Are the shares of all three Genting units (including Genting Singapore) on the way up again?