As of June 3, MGM Resorts International’s involvement in Vietnam’s long-troubled Ho Tram Strip will be a closed chapter in the company’s history. This morning, Pinnacle Entertainment announced yet another delay — shocking! — in MGM Grand Ho Tram Beach, which Jim Murren’s subsidiary, MGM Hospitality, was to manage. MGM, sensibly, never put real money into this Vietnamese chimera. Pinnacle, however, did and nearly $25 million of its $116 million investment is gone with the wind, undoubtedly to be followed by additional writedowns. Pinnacle hitched its wagon to the star of Canadian firm Asian Coast Development Ltd. and, since ACDL controls 76% of the project, Pinnacle is stuck in the passenger seat as aforesaid wagon sinks into a Vietnamese quagmire. As Deutsche Bank’s Carlo Santarelli wrote, “We view the decision by MGM Hospitality to step away from the project as a clear sign that the probability of near term solutions … is remote.” He added, dryly, “we do not believe the delay post [sic] the 1Q13 for the opening will come as a surprise to many.”
As the kids say, “LOL!” Surprised? Not hardly! MGM was circumspect with regard to Ho Tram and Pinnacle was rash. Score another victory for the tortoise over the hare.