for $1.75B, he would own majority stake in MGM Resorts
What do you mean tidy profit??? are you on drugs?
Onex Corporation has been dealt a cold deck for its big Las Vegas bet as the economic landscape in the casino mecca continues to sputter.
The private equity firm sold its stake in the storied Tropicana Las Vegas Hotel and Casino in the heart of the Las Vegas strip in late April to Penn National Gaming after holding out hope that its renovation efforts would pay off.
“We tried to protect ourselves on the downside and we paid a big price,” said Gerald Schwartz, Chief Executive Officer of Onex Corporation on an earnings call to investors.
And what about Onex’s bet on a recovery of the Las Vegas tourism scene?
“Gaming and resort revenues have not rebounded in Las Vegas as we had hoped.”
Schwartz does not see a recovery from the 2008 recession happening anytime soon.
“Las Vegas has not turned around and the new room supply did not help the situation. We wanted to build a casino network,” said Schwartz on the call.
A group led by Onex paid $330 million for the Tropicana in March 2007 and spent more than $200 million to refurbish the entire hotel. Penn National paid a total of $50 million for the Tropicana.
Sentiment: Strong Buy
does it mean possible dilution of up to 16 million shares along with the 300M$ debt retirement?
eg $300,000,000 / $18.58 = 16,146,394 shares
MGM RESORTS INTERNATIONAL ANNOUNCES CLOSING OF $300 MILLION IN SENIOR CONVERTIBLE NOTES
LAS VEGAS, June 17, 2011 /PRNewswire/ -- MGM Resorts International (NYSE: MGM) announced today that it has closed the previously announced private offering to Emerging Corporate Limited (an entity owned indirectly by Ms. Pansy Ho) of $300 million in aggregate principal amount of its 4.25% convertible senior notes due 2015. The Company received approximately $311 million in net proceeds from the offering. The net proceeds will be used to repay a portion of the Company's outstanding revolving indebtedness under its senior credit facility.
"The closing of this transaction represents continued growth and alignment across our businesses with our MGM China Holdings joint venture partner, Ms. Pansy Ho, and further improves the liquidity of MGM Resorts International," said Jim Murren, Chairman and Chief Executive officer of MGM Resorts International.
The notes are general unsecured senior obligations of the Company, guaranteed by substantially all of the Company's wholly-owned domestic subsidiaries, which also guarantee the Company's other senior indebtedness, and equal in right of payment with, or senior to, all existing or future unsecured indebtedness of the Company and each guarantor. The notes will pay interest semi-annually at a rate of 4.25% per annum and mature on April 15, 2015. The notes are convertible at an initial conversion rate of approximately 53.83 shares of the Company's common stock per $1,000 principal amount of the notes, representing an initial conversion price of approximately $18.58 per share of the Company's common stock. The initial conversion rate is subject to adjustment under certain circumstances. The notes are convertible into shares of the Company's common stock at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date of the notes.