Shares in SJM Holdings Jump at Alliance Announcement

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SJM announces an alliance that is good news for Macau.

30-second summary

  • Ms. Pansy Ho and Henry Fok Foundation announce an alliance
  • The pair will own over 50% of the “controlling shareholder” of SJM (a casino company)
  • Ho and Fok alliance boosts SJM Holdings shares by over 10%
  • All parties to work on extending SJM’s gaming concession in Macau

Share Holders HK$ increase

Recent dealings in Macau have prompted further certainty in a growing market as a family announcement cements SJM Holdings in a move that has seen shares jump. It comes after the daughter of the SJM founder and the Henry Fok Foundation confirmed an alliance that gives them majority control in the company.

At the end of this week and following the announcement, prices have risen as much as 10.6% to HK$7.96 ($1.01; £0.77). An analyst from Bernstein, Vitaly Umansky, explained just why this alliance is so important: “SJM has struggled with corporate governance issues and had been losing market share in recent years. The hope that the Pansy Ho-Fok alliance can change the direction of SJM is just that at this stage – “hope.” There remain strong embedded influences in the SJM organization that leave us skeptical that real solid changes can manifest in the near to medium term…”

By forming an alliance, Ms. Pansy Ho, the billionaire daughter of the founder of SJM who has a number of companies herself, and the Fok Foundation together will own approximately 53% of “Sociedade de Turismo e Diversões de Macau SA.” It is this organization that is the controlling shareholder of SJM. That gives them, in turn, control over the appointment of the management team within SJM, according to the exchange filing.

Company History

The astute Stanley Ho founded SJM. Recent years have been fraught with family feuds among his multiple wives and children seeking to control his empire. Ho retired just last year, leaving the position of chairman and executive director position to Ms. Daisy Ho. Ms. Pansy Ho is her full sibling.

A Ms. Leong also holds an 8% stake. Henry Fok was the tycoon who founded the foundation in his own name. His son Timothy Fok and his fourth wife Angela Leong serve as executive directors and co-chairs.

With recent dramatic increases thought unsustainable in Macau, thoughts will now turn to the renewal of licenses, something that the alliance has said is their top priority. Many licenses in Macau will be up for renewal next year.