Some predict “ugly battle”
In a gambit described as both a “stunning power play” and a “family feud,” the daughter of Macau legend Stanley Ho and her allies now hold a controlling stake in casino operator STDM, which runs SJM Holdings.
The alliance formed by Pansy Ho includes Stanley Ho’s second wife, Lucina Laam King Ying; Pansy’s own companies Lanceford and Interdragon; and the Henry Fok Foundation, named for co-founder of the Ho business empire. Together the partners hold a combined interest in 53 percent of shares in STDM, which in turn holds a 54 percent stake in SJM. SJM is chaired by Pansy’s sister and ally, Daisy Ho, reports the South China Morning Post.
According to GGRAsia, SJM Vice Chairman and CEO Ambrose So applauds the development, seeing it as healthy for the casino company. Speaking to the Hong Kong Economic Journal, So said the move would “reduce the misunderstandings and speculation” about the company, ensure that corporate governance is “more standardized” and have an overall “positive influence” on SJM’s quest for an extension of its Macau gaming concession, which expires next year. Shares of SJM Holdings rose nearly 10 percent on the news, while shares of another Ho company, Shun Tak Holdings, rose 7.7 percent.
The action gives Pansy the edge over her stepmother, Angela Leong, Stanley Ho’s fourth wife, a co-chair and executive director of SJM Holdings. Both Pansy and Daisy reportedly have frosty relationships with Leong, who is also a Macau legislator.
An anonymous source cited by Inside Asian Gaming said the change is “long overdue.” The person added, “It will take years upon years to fix SJM’s operations, (but) this could be the starting point.” But brokerage Bernstein said it will cause an “ugly battle” between the current management including Leong and the newcomers.
“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.” The analyst team added that Leong and So, along with others in management, “still hold material direct interests in SJM and hold considerable sway over SJM operations.”
The Post, on the other hand, said investors “appear to have given their backing to Pansy Ho,” Macau’s new “casino queen.” It noted that shares of Ho’s company, Shun Tak Holdings, rose after she “gained the upper hand in her battle for control of the Macau casino holding company co-founded by her father, ‘King of Gambling’ Stanley Ho Hung-sun.”
Gordon Tsui Luen-on, managing director of investment at Hantec Pacific in Hong Kong, said the agreement between Pansy Ho and the Fok Foundation confirms that she and her allies “have majority control of the STDM and hence SJM Holdings. With a single majority voice, this will remove the uncertain of the battle between different shareholders on the future development of the casino company. This has attracted investors to buy shares of SJM and Shun Tak.”
Louis Tse Ming-kwong, director of Hong Kong brokerage VC Wealth Management, said the agreement has helped to bolster investor confidence in Shun Tak and SJM. “The share price rose on the news of the agreement, which may well be only a short term phenomenon. For the longer term, investors would need to wait to see if the new alliance can really help SJM and Shun Tak to improve their business development and profit before they would further invest in the company,” Tse said.
SJM Holdings controls 20 of Macau’s 39 casinos. Pansy Ho, who is also co-chair and executive director of MGM China Holdings Ltd., is currently worth $5.3 billion.
