MGM China tells investors that the company has no plans to restructure ownership of the company
One of the world's leading global hospitality companies, operating a portfolio of destination resort brands, MGM China, has informed investors that it has no plans for ownership restructuring.
The news comes as a response to an open letter from MGM Resorts Chinese subsidiary's and largest public stakeholder, Snow Lake Capital. MGM Resorts controls 55.6% stake in MGM China; its majority shareholder. The Asian investment management firm, Snow Lake Capital, currently holds 7.5% in MGM China.
The letter form Snow Lake Capital proposed to MGM Resorts to sell 20% of its MGM China stake to a Chinese strategic partner from the internet, travel or leisure industries, in bid to put a foot in the door for future growth. It also stressed the value of such move for investors as it could “create a win-win transaction for all parties involved and deliver significant shareholder value to both companies".
While MGM Resort had previously assured that they will act in the best interest of the stakeholders, MGM China released their statement claiming the company will not be restructuring.
The letter read:
The board of directors of the Company is aware of an open letter issued by Snow Lake Capital, an institutional investor and a shareholder of the Company, to the board of directors of MGM Resorts International, the Company’s controlling shareholder, on 6 January 2021, making recommendations on the shareholding structure and future development of the Company,
The Board confirms that, as at the date of this announcement, the Company has no plans of restructuring. The Board will continue to communicate with the Company’s shareholders and operate the Company in the best interests of its shareholders and stakeholders, enhancing shareholder value and performance of the Company.
MGM China's response didn't have drastic consequences on market performance as its stock is currently holding in the green zone.
Source: Gambling News
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