Sean Ma, the founder and CEO of Snow Lake Capital, says he penned an open letter this week calling for MGM Resorts International to sell off 20% of its stake in MGM China because phone calls with the company had not been positive.
In a provocative interview with Chinese media outlet 36Kr, Ma also suggested he was open to further discussions with the US casino giant but appeared to warn he could resort to corporate force if necessary. Snow Lake Capital is MGM China’s largest public shareholder with a 7.5% interest.
As reported by Inside Asian Gaming, Ma wants MGM Resorts to offload 20% of its current 55.95% stake in MGM China to either a leading Chinese consumer internet company or a travel and leisure company as part of a strategic initiative he believes would better position both companies for future growth.
He subsequently told 36Kr on Thursday that he has “absolutely no intention to kick MGM Resorts out.” Instead, “the deal will open up a lot of room for its long-term growth over the next decade or two.” However, he noted that his fund is also “prepared” if MGM Resorts refused to sell shares, adding “we Chinese people always try peaceful means before resorting to force.”
Ma explained that the reason he issued the open letter was that he had previously made phone calls to MGM’s CEO – presumably referring to Bill Hornbuckle – but “the other party’s attitude wasn’t positive.”
He said there are only 18 months left before MGM’s Macau gaming concession expires, meaning the re-tendering process is “quite imminent, however MGM Resorts is not taking this seriously enough.”
Ma said that senior executives of MGM Resorts may not be so aware of Macau’s long-term positioning and policy trends, and that due to the difficulty of traveling as a result of COVID-19, “they may not understand how critical the timing is.”
While Ma’s open letter names four companies he believes could add value by purchasing a 20% stake in MGM China, he said “there are definitely more. Any company that can help with Macau’s diversity, MGM China’s digital transformation and improve customer experience, will be a fit strategic investor.
“We have spoken to several of them, and they are very interested and willing to discuss further. As a long-term investor, I am firmly optimistic about the long-term development of Macau. In the long run, compared to Las Vegas, I think this market is far from saturated.”
Ma himself may even be eying a position on the MGM China board, noting that he has long been closely connected with the company.
“I’ve known the President and COO Hubert Wang for almost 10 years. He was born in Shanghai, and has a good understanding of Chinese culture,” Ma said.
“And Pansy Ho, the core figure of MGM China, is a leader with lofty ideals. She is the key guide for MGM’s future development in Macau.
“If Ms Ho believes I can bring value to the company by joining the board, then I am obliged.”
