Macau Casino Billionaire Stanley Ho Takes Company Public

Ho has been pondering this move for a while, but was delayed by legal battles with his estranged sister, Winnie.

Stanley Ho, who for over forty years built a fortune running a gambling monopoly in Macau, has moved to take his company public in order to compete with the new interests in town.

Ho's Sociedade de Jogos de Macau Holdings (SJM) will have an initial public offering of shares, to be sold by subscription, from tomorrow until July 2nd. Estimates are that the company will raise approximately $655 million in cash through the public offering. 

Ho has been pondering this move for a while, but was delayed by legal battles with his estranged sister, Winnie, who fought to control SJM. A January sale, which might have netted $1 billion, was postponed due to the power struggle.

Ho has found that well-heeled competitors, including Wynn Resorts, MGM Mirage, and Las Vegas Sands have cut sharply into his annual revenue stream. While Ho accepted the end of his monopoly, and even had his daughter, Pansy, take a partnership with MGM Mirage, he soon found his wallet challenged by the enormous spending of the newcomers.

Ho still controls most of the ferries servicing Macau, and he has inside connections that run deep with tourist agencies throughout Asia; both of these are vital to sustain a flow of patrons through the casinos.

All Ho needed was to adjust to a competitive way of doing business, and he has responded in force. Not only will the IPO give him the cash necessary to keep his Grand Lisboa hotel and casino at the forefront of Macau gambling, but he plans to expand his operations to become not just a gambling destination, but a tourist one.

In keeping with his strategy of using his advantages with Asian transportation and tourist bureaus while negating the organization and capital advantages of his competitors, Ho had also recently hired away the Chief Operating Officer from Venetian Macau, which is Las Vegas Sands' company in Asia. Frank McFadden has assumed the role of president of business development for SJM.

Analysts agree that, in relation to competitors' stock prices, the SJM IPO is a bargain. It seems likely both Stanley Ho and his new backers will profit from their association.