A potential shake-up of Macau concessionaire SJM Holdings’ management structure is “long overdue” according to numerous experts in the matter, but the jury is out on whether a Pansy Ho power play revealed on Thursday can turn the company around.
As reported by Inside Asian Gaming, Hong Kong-based Shun Tak Holdings – of which Ho is Chairman – announced late Wednesday that it was part of a new five-way alliance including Ho herself, two other companies she controls (Lanceford and Interdragon) plus the Fok Foundation in an effort to have greater say in the make-up of the boards of both SJM and its majority shareholder STDM.
The alliance holds a combined interest in 53% of shares in STDM, which holds a 54% stake in SJM.
Asked for their take on the move, one insider who asked not to be named told IAG that a change to SJM’s management is “long overdue and while it will take years upon years to fix SJM’s operations, this could be the starting point.”
They also described current management as having been at the helm of a “disastrous ride” and that it was “hard to have any confidence that Cotai (the under-construction Grand Lisboa Palace) will represent anything other than the same pattern for the company. Something needs to change and even the government would support a move that shakes things up.”
However, analysts from brokerage Bernstein warned in a Thursday note that any play by the Pansy Ho-Fok alliance would likely result in an “ugly battle” between the current management, which includes Angela Leong, and the new guard.
“Prior attempts to make changes have amounted to greater complexity,” Bernstein said. “The hope that the Pansy Ho-Fok alliance can change the direction of SJM is just that at this stage – ‘hope’. There remain strong imbedded influences in the SJM organization that leave us skeptical that real solid changes can manifest in the near to medium term.”
Adding to the complexity of the current situation are family ties. Under SJM’s new structure following the official retirement of Macau gaming’s founding father Dr Stanley Ho last year, the company now has four different people in the Chairman’s office with Dr Ho’s daughter Daisy Ho Chairman, Timothy Fok of the Fok Foundation and Dr Ho’s fourth wife Angela Leong Co-Chairmen, and Ambrose So Vice-Chairman.
Pansy Ho is a full sister of Daisy Ho, and it is well known that her relationship with Leong is frosty, which could provide even more reason for the latter to dig in her heels against any challenge from the Pansy Ho-Fok alliance.
“Some management changes may occur this year (Louis Ng, the current and long-serving COO may retire), but two key parties – Executive Director Angela Leong and CEO Ambrose So – may not be as simple to replace,” Bernstein said.
“Leong and So (along with others in management) still hold material direct interests in SJM and hold considerable sway over SJM operations. The move to replace either one, without their willingness to go, may be an ugly battle.”