Macau tycoon Stanley Ho’s casino flagship, Sociedade de Jogos de Macau (SJM) Holdings, kicked off pre-marketing to raise about $500-$600 million in a scaled-back Hong Kong initial public offering on Friday, according to a fund manager briefed by the underwriter.
The company, which had hoped to raise $1 billion before withdrawing a planned offering in January, planned to conduct investor education from Friday to Wednesday in Hong Kong before heading to Singapore for meetings on Thursday, according to a sale note sent to fund managers.
The firm had pushed back the launch of its deal in January to address a query made by Hong Kong’s Securities and Futures Commission.
Media have reported that Stanley Ho and his sister, Winnie Ho, have been locked in a legal dispute over the shareholding structure of SJM’s parent firm, the Stanley Ho-controlled Sociedade de Turismo e Diversoes de Macau (STDM).
No formal roadshow schedule had been set, another source said.
The Hang Seng Index has lost 6 percent this week in volatile trade on fears of rising inflation, and is down 18 percent this year, which is expected to curb enthusiasm for upcoming issues.
Almost a dozen companies planning Hong Kong IPOs worth about $8 billion have delayed or cancelled their offerings so far this year due to poor investor sentiment.
Besides the gloomy stock market, SJM’s market share has shrunk due to increased competition following industry liberalisation that has eroded Stanley Ho’s one-time monopoly.
Gaming giants led by U.S.-based Las Vegas Sands and Wynn Resorts Ltd have built glitzy new casino properties in Macau. Ho’s market share stood at 42 percent in January, according to a research report by IPO sponsor Deutsche Bank .
The report predicted that SJM’s net profit last year fell by about 50 percent to HK$1.22 billion ($156.4 million) from HK$2.4 billion in 2006.
Deutsche Bank had expected the company’s price-to-earnings multiple at the time of its IPO to be about 16.4-19.4 times forecast 2008 earnings.
A Deutsche Bank spokesman could not immediately be reached for comment.
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