Pansy Ho, the Co-Chairperson and Executive Director of MGM Holdings and daughter of Macau gaming kingpin Stanley Ho, appears to be planning a bid for control of SJM Holdings following an announcement on Wednesday night that four of her companies have formed an alliance with major shareholder the Fok Foundation.
Shun Tak Holdings, of which Ho is Chairman, issued a filing with the Hong Kong Stock Exchange last night in which it revealed that an agreement had been formed between Ho-controlled companies Shun Tak, Lanceford and Interdragon as well as the Fok Foundation and Ho herself.
Their combined interests amount to 53% of shares in STDM, which holds a 54% stake in Macau concessionaire SJM. The Fok Foundation, to which STDM co-founder Henry Fok transferred his shareholding in the early 2000s, controls around 26.5% of STDM – comprising half of the new alliance’s stake.
A research note published by Deutsche Bank overnight described the move as one of the most significant power plays in Macau’s recent history with one of the possible consequences being a move against current SJM Co-Chairman and Executive Director Angela Leong, Dr Stanley Ho’s fourth wife.
“Notably, one key shareholder not in the agreement is Angela Leong,” Deutsche Bank wrote.
“We see a risk that, when the current terms of board directorships expire for Leong and her associates, namely SJM’s CEO (Dr Ambrose So) and COO (Louis Ng), they may not be re-elected again. We believe the COO’s term expires in June 2019 and the other two in June 2020.”
In its filing on Wednesday, Shun Tak said that the parties have endorsed a common commitment to advancing certain fundamental objectives in relation to STDM and the STDM Group, including the extension of SJM’s gaming concession which is held by its wholly-owned subsidiary SJMSA and ensuring that STDM remains the majority shareholder in SJM.
The alliance said it would make “best efforts to exercise their respective powers and rights” in submitting a common proposal for the election of STDM board members when the time to vote on nominees comes, with the alliance pointing to 31 March 2019 as the next such occasion.
Likewise, the group will exercise its rights in relation to the nomination of directors of SJM including Chairman and Co-Chairman.
“The Parties have also agreed to submit a common proposal for the election of the Board of SJMSA,” the filing said.
Formation of this alliance could prove to be one of the biggest events in Macau gaming since liberalisation of the industry almost 20 years ago, potentially leading to a seismic shake-up in control of Macau’s oldest gaming dynasty.
SJM controls 20 of Macau’s 39 operational casinos, including its flagship Grand Lisboa, three “self-promoted” casinos in Lisboa, Oceanus at Jai Alai and Casino Taipa at Regency Art Hotel and 16 casinos operated by third parties under SJM’s gaming license.
However, its market share has slipped considerably in recent years and it is the only one of Macau’s six concessionaires yet to open an IR in the SAR’s new gaming hub of Cotai. Grand Lisboa Place, due to open in 2020, has been plagued by construction delays.
Inside Asian Gaming will provide further updates as this story develops.