Macau's gambling icon going public
HONG KONG (AFP) — Stanley Ho, who for decades held a monopoly on casinos in Macau, is taking his flagship firm public Thursday as he battles the Las Vegas giants that have shaken up the territory's gambling industry.
Once the only game in town, the 86-year-old tycoon's iconic casinos are now just one piece of the multi-billion-dollar gaming industry in the southern Chinese city, which last year topped the Las Vegas Strip in revenues.
Now Ho is offering shares in Sociedade de Jogos de Macau Holdings (SJM), the company that made him one of Asia's richest men -- and that is believed to still be Macau's biggest casino operator despite losing the monopoly in 2002.
A company source who declined to be named said SJM is looking to raise more than five billion Hong Kong dollars (655 million US) for the shares, which go on subscription offer from June 26 to July 2.
The move has been repeatedly delayed, reportedly due to a bitter fight for control with his estranged sister Winnie. But the tycoon, who also owns most of the lucrative ferry services to Macau, said this week it would go ahead.
"I want everyone to know we will launch the initial public offering according to plan," Ho said in Hong Kong at a meeting this week with potential investors. "We will not let anyone stop us."
Analysts say that taking SJM public will bring greater transparency to the former Portuguese colony, long saddled with a murky reputation but now seen as a premium destination for gamblers from across Asia and beyond.
Ho, born in 1921 into one of Hong Kong's most powerful families, moved to Macau in his 20s and carved out his fortune by cornering the market on gambling, holding a monopoly for around four decades.
Macau ended the monopoly six years ago, allowing in foreign casino companies that answered to much stricter laws and regulation of the industry in their home countries.
The arrival of Las Vegas Sands and Wynn Resorts, and the rapid development of a reclaimed parcel of land dubbed the Cotai Strip, has transformed the sleepy territory into a gambling and nightlife hotspot.
Macau's casinos took in more than 10.3 billion dollars last year, topping the Las Vegas Strip for the first time -- and Ho has made no secret of his desire to remain a major player.
Last year he opened the Grand Lisboa hotel and casino, a 500-million-dollar, 430-room golden tower that dominates Macau's skyline, and he is now looking for a cash infusion by taking the company public.
"It will turn SJM into a public company that has transparency and a regulatory compliance mechanism," said Jonathan Galaviz of Globalysis, a travel and leisure consultancy.
He said that SJM, a home-grown Asian company, enjoyed an unmatched relationship with junket operators and travel agencies, but that it had less access to capital markets than its listed international competitors.
With the new source of capital, SJM can play a larger role in turning Macau into not only a casino destination, but a tourism destination where people would visit several times a year and stay longer, Galaviz said.
"SJM has to develop tourism value propositions that are large and attractive enough to be interesting for consumers all the way from Singapore to China to Korea," he said.
