otel and casino operator Macau Legend announced yesterday that the merger attracted us$ 62 million, a 4% stake of the total investment, from gambling tycoon Stanley Ho's SJM Holdings, according to a Wall Street Journal report.
Upon the merger of Macau Legend Development (MLD) with Macau Fisherman's Wharf International Investment (MFW), a series of redevelopment projects, which have been approved by the government, will be launched with a total of us$ 650 million in investment. It will feature hotels, a marina and a museum with dinosaur fossils on loan from mainland China.
David Chow Kam Fai, MLD’s Co-Chairman and CEO, plans to redecorate existing buildings in the Macau Fisherman's Wharf entertainment complex and build new facilities, namely a dinosaur museum, a yacht club and two hotels, besides others. The project is scheduled to be completed by the end of 2015. By then Macau Legend will have 1,200 hotel rooms, making it one of the largest hotel operators on the peninsula, according to Chow. “New entries to the Macau market think that the only option is to replicate the Las Vegas Strip,” he added.
Ina Chan, known as Mr Ho’s “third wife”, has a stake of about 18 per cent in the 133,000 square metre site. The rare move by the local casino operator represents a fightback against foreign competitors, which are aggressively expanding their Las Vegas-style casinos in Macau – the world’s largest gaming market by annual revenue.
The construction of major new hotels and casinos in Macau’s newly reclaimed Cotai Strip, which come as the market witnesses a major slowdown in revenue growth, would result in fierce competition among those properties, said Mr Chow, a former lawmaker and long-time business partner of Mr Ho.
Mr. Chow and Mr. Ho founded Macau Fisherman's Wharf International in 2000 to operate the Macau Fisherman's Wharf entertainment complex, which has a casino, a boutique Rocks Hotel and a convention and exhibition center.
SJM still holds the biggest market share, at 27 per cent, of Macau’s gaming market, worth us$ 34 billion a year. But its share has declined steadily as new entrants, such as Sands China, Wynn Macau and Galaxy Entertainment, spend billions of US dollars expanding after Mr Ho lost his gaming monopoly in 2002.
Analysts said that SJM had appeared less aggressive than rivals after Mr Ho suffered a stroke in 2009, which sparked a feud between his three partners and his many children. Angela Leong, known as the “fourth wife”, is the only family member to have a board seat at SJM, where she is managing director.
“The fact that she approved an investment in a company part owned by the third wife has the appearance of a friendly gesture,” said Gabriel Chan, gaming analyst at Credit Suisse. SJM’s share price has one of the lowest price-to-earnings ratios among Macau gaming stocks, partly because of concerns over the possibility of more family disputes when Mr Ho dies.
Mr Chow said new transport links could see another jump in arrival numbers in a few years’ time. A us$ 10.6 billion bridge linking the Hong Kong international airport to Macau and mainland China is under construction and expected to open in 2016.