tanley Ho gave up a 31.7 % stake in Sociedade de Turismo e Diversoes de Macau to two companies owned by members of his family, according to a statement from SJM, Asia’s largest casino operator. He “no longer has an attributable interest” in STDM, as the parent is known, the statement said.
SJM fell the most in a month in Hong Kong trading on concern the ownership transfer may affect decision making. Ho, who held a gambling monopoly in Macau for four decades until 2004, was released from hospital in March after seven months and two operations.
“He’s been the real strength,” Andrew Sullivan, director of institutional sales at OSK Securities Hong Kong Ltd., said by phone today. “Now, instead of dealing with Stanley, you may deal with a lot more people. It introduces a huge element of uncertainty in what is already a cut-throat business.”
SJM fell 4 % to close of trading in Hong Kong. It earlier slid as much as 8.9 %. The stock has more than tripled in the past year. The 31.7 % stake in STDM will be held by Lanceford, according to the statement. Action Winner Holdings will hold a 50.55 % stake in Lanceford and Ranillo Investment will have 49.45 %.
Action Winner is owned by Ho’s third wife Chan Un-chan and Ranillo Investment is owned by Ho’s children Pansy, Daisy, Maisy, Josie and Lawrence, according to a statement from Brunswick Group, the public relations company for Lanceford. “Stanley Ho is getting old,” Victor Yip, Hong Kong-based analyst at UOB-Kay Hian, said by phone. “Today’s action is part of his plan to distribute his wealth to family members. SJM’s daily operations are already handled by Ho’s competent assistants.”
Ho now holds 100 shares of STDM, according to SJM’s statement to the Hong Kong’s stock exchange. SJM holds the biggest market share in Macau, the world’s biggest gambling hub, and is 56 % owned by STDM, according to data compiled by Bloomberg.
“Stanley Ho’s effective stake in SJM is lowered to less than 2 %,” Karen Tang, a Hong Kong-based analyst for Deutsche Bank AG, said in a note to clients today. “While this may create near-term uncertainty, we think this is long-term positive as it further lowers succession risks.”
“There will be no change in management or strategic direction” after the transfer, SJM said in its statement. SJM has a market share of 32.6 % in the former Portuguese colony, the only place in China where casinos are legal, according to a Jan. 17 research note from CLSA analysts Aaron Fischer and Huei Suen Ng. Sands China has 16.5 % followed by Wynn Macau with 15 % and Galaxy Entertainment Group with 12.6 %.
Melco Crown Entertainment, a joint venture between Lawrence Ho’s company and Australian billionaire James Packer’s Crown, has a market share of 11.7 %, while MGM Resorts International’s venture with Pansy Ho had 11.6 %, the CLSA analysts estimated. SJM runs 20 casinos in Macau, including its flagship Casino Lisboa, according to the city’s Gaming Inspection and Coordination Bureau.
Macau Casino Revenue
Casino revenue in Macau may climb 30 % to us$ 30 billion this year as visitors from mainland China increase, Fischer and Ng forecast in their note.
Gambling revenue for the city’s six casino operators rose 58 percent% to us$ 23.5 billion last year, according to government data. Last year’s increase of us$ 8.6 billion is 50 % more than the total gambling revenue for the Las Vegas Strip for all of 2010, according to data compiled by Bloomberg.
Ho last month transferred his 7.7 % stake in SJM to companion Angela Leong, mother of his five youngest children. Shun Tak Holdings, a property developer that also operates ferries between Hong Kong and Macau, on December 2 said Ho cut his direct ownership in the company in favor of two holding companies in which his children have stakes.