Billionaire Stanley Ho gave up almost all his stake in the parent of SJM Holdings Ltd. (880), Asia’s biggest casino company, to resolve a family dispute that pitted some of his children against him and led to lawsuits.
Managing Director Angela Leong On Kei, mother of Ho’s five youngest children, will get 6 percent of SJM’s parent Sociedade de Turismo e Diversoes de Macau SA and other family members will get 25.538 percent, SJM said yesterday. SJM rose to the highest in two months in Hong Kong trading today.
“Angela Leong seems to be the winner as her part of the stake becomes bigger than before,” said Lam Ka Kei, an analyst at Redford Asset Management Ltd. in Hong Kong. “It will affect SJM’s share price positively because the company is moving toward a steady situation.”
The 89-year old tycoon earlier said daughters Pansy Ho and Daisy Ho and other family members seized his 31.7 percent stake in STDM, as the parent is known, forcing him to sue to reclaim his assets. SJM, which posted an almost fourfold jump in 2010 profit, runs most of the casinos in Macau, where gambling revenue is more than four times that of the Las Vegas Strip.
SJM rose 5.9 percent to HK$13.98, the highest since Jan. 21. STDM owns 55.69 percent of SJM, according to data compiled by Bloomberg.
Ho transferred his 7.7 percent stake in SJM to Leong in December. The dispute then started when Chan Un-chan, whom Ho refers to as his third wife, and children Pansy, Daisy, Maisy, Josie and Lawrence took control of Lanceford Co., which holds the biggest stake in STDM, according to statements in January.
Children and Women
Ho, who has 16 surviving children from four women, will retain 0.117 percent in the parent. The statement didn’t identify the other family members.
“The arrangement partially removed the overhang on the stock and will allow the market to turn its focus on SJM’s fundamentals,” said Donald Cheng, an analyst with Haitong International Securities in Hong Kong. Cheng, ranked No. 1 by Bloomberg in terms of one-year return among analysts covering SJM, has a “buy” rating on the stock.
The January transfer was against the wishes of Ho, who had wanted to divide his assets equally among the family, his lawyer Gordon Oldham said. Closely held STDM also has investments in construction, hotels and Macau’s airline.
The settlement “has no effect on the company and there will be no change in management or strategic direction of the company,” SJM said in the statement.
Ho, ranked Hong Kong’s 13th richest man with a net worth of $3.1 billion by Forbes magazine, said on March 10 the dispute was settled, without giving details.
He built his fortune over five decades after Macau’s colonial government granted him and his partners a gambling monopoly in 1962.
The monopoly wasn’t renewed after 2001 and Macau granted licenses to casino rivals, including Sheldon Adelson’s Las Vegas Sands Corp. and Steve Wynn’s Wynn Resorts Ltd.
During the dispute, family members and Ho issued conflicting statements, with his lawyer showing recorded video clips of the tycoon issuing instructions.
SJM said March 17 net income increased to HK$3.56 billion last year from HK$906.7 million in 2009. Gamblers betting as much as 2 million patacas ($250,000) a hand are driving record growth in the only place in China where casinos are legal.
Casinos operated by Ho and his family have a more than 50 percent market share in gaming revenue in the Chinese enclave. The tycoon was released from a hospital in March 2010 after a seven-month stay.
--Michael Wei. Editors: Hwee Ann Tan, Terje Langeland
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