Text By PRUDENCE HO And KATE O'KEEFFE HONG KONG?In the latest sign of the choppy Hong Kong market for initial public offerings, Australian miner Resourcehouse Ltd. is expected to cut the size of its planned $3 billion offering, even as a Macau casino joint venture that includes MGM Resorts International seeks a larger-than-anticipated range of $1 billion to $1.5 billion from investors.
Resourcehouse, controlled by billionaire Clive Palmer, plans to cut its IPO from $3 billion previously after it excluded oil and gas resources from the deal, a person familiar with the situation said Monday. The company and its bankers on Friday began premarketing the offering, which involves gauging investor interest and determining a price range.
The planned offering will be the miner's fourth attempt to list in the city after it postponed its IPO investor presentations in March because of market weakness at the time, people familiar with the situation said earlier.
Resourcehouse's IPO will be among the biggest this year in Hong Kong, joining the up to US$10 billion Hong Kong-London listing of Swiss commodities trader Glencore International AG in tapping investor funds in coming months.
Other foreign companies that plan to list in Hong Kong in the coming months include U.S. luggage maker Samsonite, Italian fashion company Prada SpA, Japanese clothing retailer Baroque Japan Ltd. and casino-resort operator MGM China Holdings Ltd., which started pre-marketing Monday for its up-to-$1.5 billion IPO.
Hong Kong has been the world's top venue for IPOs for the past two years. But this year has proven turbulent, with some companies reducing the size of their offers or postponing them, while other see strong demand.
Resourcehouse now aims to launch investor presentations, or roadshows, on May 17 and start the retail offering on May 26, said the person familiar with the matter. Roadshows help determine a final price. The company aims to list on the Hong Kong stock exchange on June 9, the person added.
It's unclear which assets Resourcehouse is now excluding. According to a February research report by BOC International Holdings Ltd., which is involved in the offering, the potential listed resources include a contractual right to mine thermal coal in Central Queensland, a contractual right to mine magnetite iron ore in Western Australia, and interests in various oil & gas exploration permits in Western Australia's Canning Basin and Papua New Guinea's Gulf of Papua.
BOC International is the sole sponsor and a bookrunner of the deal, the person said, adding HSBC Holdings PLC, UBS AG and Royal Bank of Scotland Group PLC are added as the joint-bookrunner, but JP Morgan Chase & Co. has been removed from the bankers' list. Bookrunners connect the offerings with big investors.
Meanwhile, MGM China, a casino joint venture between Las Vegas based-MGM Resorts and a daughter of gambling tycoon Stanley Ho, aims to launch its roadshows on May 17 and start its Hong Kong retail offering on May 23, another person familiar with the situation said Monday.
The top end of the current fundraising goal of US$1 billion to US$1.5 billion implies the company is now looking to raise up to three times the amount it had previously sought. People familiar with the matter had earlier said the company wanted to raise US$500 million in a 2010 listing.
The person added the company aims to list on the Hong Kong stock exchange on June 3.
Under a deal announced last month, the U.S. casino company will get 51% ownership of MGM China after the venture's IPO. Partner Pansy Ho will retain a 29% interest in the public company, with the remainder sold to the public and the proceeds going to entities controlled by Ms. Ho. The two partners currently each hold a 50% stake in MGM China, which made a net profit in 2010 of 1.57 billion Hong Kong dollars (US$202 million), reversing a HK$167.13 million loss in 2009.
J.P. Morgan Chase & Co., Bank of America-Merrill Lynch, Morgan Stanley are the bankers on the MGM China's IPO, the person said.
