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Stanley Ho gives up ownership in Macau casinos

Hong Kong billionaire Stanley Ho transferred nearly his entire ownership stake in his Macau casinos to family members, giving up control of the gaming operation.

In a filing Monday with the Hong Kong Stock Exchange, SJM Holdings said Ho, 89, the company’s chairman and CEO no longer has an “attributable interest” in the casino company.

International law enforcement authorities have long alleged that Chinese organized crime triads influenced the Macau casinos operated by Ho.

Ho, who has an estimated net worth of $3 billion, had a government-granted monopoly on Macau gambling for almost 40 years until control of the Portuguese colony was transferred to China at the end of 1999.

SJM operates more than two dozen Macau casinos, including the Hotel Lisboa and Grand Lisboa. The company still maintains the largest share of Macau’s gambling market despite entry into the market over the past decade by Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International. In December, SJM casinos collected more than 30 percent of Macau’s gambling revenues.

Analysts said the ownership change came as a surprise but should be good for the company.

“We consider this move as a longer-term positive for SJM shares as this ongoing estate planning process should resolve some of the outstanding concerns over the ultimate succession of power,” Union Gaming Group principal Bill Lerner told clients in a research note.

Ho has 17 children, some of them involved in the casino business.

“It sounds fairly consistent with what he has been doing in terms of getting his affairs in order,” gaming analyst of Philip Tuk of RBS in Hong Kong told Reuters News Service. “It’s probably good if you are an SJM shareholder, because he is trying to ensure there isn’t going to be a big fight after he has gone.”

The most prominent of Ho’s children is daughter Pansy Ho, who owns 50 percent of the MGM Grand Macau with MGM Resorts International. She is also managing director of another of her father’s companies, Shun Tak Holdings, which operates passenger ferries between Hong Kong and Macau.

The organized crime allegations against Stanley Ho’s casinos surfaced when Nevada and New Jersey gaming regulators looked at the business relationship between MGM Resorts and Pansy Ho.

Nevada said Pansy Ho was a suitable business partner, but New Jersey rejected the business relationship, causing MGM Resorts to sell its 50 percent stake in Atlantic City’s Borgata and other land holdings.

According to the filing with the Hong Kong Stock Exchange, Ho transferred his stake in Sociedade de Tourismo e Diversoes de Macau, the company that controls SJM Holdings, to two firms controlled by family members. Ho retained 100 shares in the casino group.

The Associated Press in Hong Kong reported half of the stake was transferred to a company owned by Ho’s third wife and the rest was transferred to another company owned by Ho’s five children from his second wife. The stake is worth about $1.7 billion, based on SJM’s closing share price Monday.

The company said the switch won’t affect management or the direction of SJM.

Ho has been absent from the public since 2009, when he had several undisclosed medical issues. Macau and Hong Kong media at the time reported that he underwent brain surgery after hitting his head.

The changes are the latest step in his succession plans. In December, SJM announced that Angela Leong, Ho’s fourth wife, had replaced him as managing director.

Macau’s casino gambling revenue surged by more than 50 percent in 2010 to $23.52 billion, solidifying its rank as the world’s biggest gambling market.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

 

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