[Analytics] Takeover at Macau’s oldest gaming concession

A cooperation agreement signed this week between Pansy Ho and the Henry Fok Foundation is indicative of a takeover at Macau’s oldest gaming concession, Sociedade de Jogos de Macau (SJM), with the two shareholders appearing to edge out familial rivals with smaller stakes. Daniel Beitler specially for the Macau Daily Times.

Pansy Ho and the Henry Fok Foundation together control a 53 percent stake in Sociedade de Turismo e Diversões de Macau (STDM), which in turn owns slightly over 54 percent of SJM Holdings.

Signed on Wednesday, the agreement spells out a joint commitment to advancing three principle objectives, as well as the means of achieving them – namely by using their majority voting power to determine the company’s board of directors.

First among the objectives is an extension of SJM’s Macau gaming concession, via its wholly-owned subsidiary SJMSA, so as to allow the casino business to continue to be a “fundamental asset and source of revenue” for the company. SJM has already signaled its intent to solicit a two-year extension of its concession, which will otherwise expire in March 2020.

The partners also stress their commitment to implementing “best practices” on corporate governance and legal and regulatory compliance across the STDM Group, as well as the maintenance of STDM’s position as the owner of more than 50 percent of the total issued shares of SJM.

According to a filing to the Hong Kong Stock Exchange made by Shun Tak Holdings, the agreement “reflects the practice of discussion and consensus over many years between the Parties and their predecessors regarding STDM and the STDM Group.”

This consensus will be carried forward to the STDM board election, which will be held on or before March 31, 2019. At said time, the two parties will submit a common proposal and jointly agree upon the appointment of the company’s chairman and managing director, “consistent with the pursuance of the [abovementioned] objectives,” notes the Wednesday filing.

Family patriarch Stanley Ho last year completed the carve-up of his business empire and stepped down from his role in the company, leaving Pansy’s sister Daisy Ho as SJM Holdings chairman. Meanwhile, Stanley Ho’s fourth consort and current lawmaker Angela Leong was nominated as a co-chairman along with Timothy Fok, while chief executive Ambrose So was made vice chairman.

Controlling about 8.62 percent of the company, Angela Leong is notably absent from the agreement and may see her influence wane if her interests are not aligned with that of the Pansy-Fok alliance. Citing industry analysts, GGR Asia reported that Leong is seen by some to lead a rival faction to Pansy Ho inside the casino operator’s board.

Since its founding in 1962, STDM has been directly or indirectly majority-controlled by the partnership of the Ho and Fok families. At present, the executive directors are Pansy Ho, Daisy Ho, Maisy Ho, David Shum and Rogier Verhoeven, while the independent non-executive directors are Norman Ho, Charles Ho, Michael Wu and Kevin Yip.