Macau tycoon Stanley Ho's casino flagship, Sociedade de Jogos de Macau (SJM), has delayed its Hong Kong IPO trading debut by a week to July 16 amid a legal challenge by Ho's estranged sister.
Vincent Yu
Macau tycoon Stanley Ho smiles during a party to celebrate his 85th birthday in Hong Kong Monday, Nov. 20, 2006. (AP Photo/Vincent Yu)
SJM, which vies with the likes of Las Vegas Sands, and MGM Mirage in Macau's booming gaming industry, also said in a statement on Wednesday that successful share applicants had the right to withdraw their applications.
The firm's shares had been set to start trading on July 10.
The news comes as a Hong Kong court is set to decide later on Wednesday whether a stock market listing of the casino operator can go ahead after a last-minute legal challenge by Winnie Ho.
The siblings have been locked in legal dispute over the shareholding structure of SJM's parent, the Stanley Ho-controlled Sociedade de Turismo e Diversoes de Macau (STDM).
Winnie Ho has been trying to block the scaled-back $494 million initial public offering and has filed more than 30 lawsuits against her brother in recent years, most of them in Macau, according to SJM's listing prospectus.
Winnie Ho would appeal if the Hong Kong court's decision went against her, her spokeswoman reaffirmed on Wednesday.
Some analysts said the legal challenge had dampened investor confidence in the IPO.
"If I had applied for shares of SJM's IPO, I would prefer to withdraw as it is very likely SJM will trade below the offering price on its trading debut even if the listing is postponed to next week," said Adam Tam, a fund manager at Pacific Sun Investment Management.
Tam added if more subscribers withdrew their IPO applications, SJM was very likely to shelve the deal because of weak market demand.
SJM said on Wednesday the retail portion of its IPO had been 1.17 times subscribed.
Listing Decision
"If a court of Hong Kong quashes a listing decision, the direct or indirect effect of the order of that court might be that the shares are suspended or delisted from trading on the Stock Exchange," SJM said in the statement.
It added that the legal dispute might have an impact on the trading price of the shares if the listing went ahead.
SJM had hoped to raise $1 billion in an IPO in January, but shelved the plan amid a weak stock market and queries made by Hong Kong's Securities and Futures Commission regarding the shareholding structure of SJM's parent firm, STDM.
Winnie Ho's lawyer accused regulators of procedural impropriety as he represented his client at a judicial review at the city's high court on Tuesday.
The lawyer said Hong Kong's Securities and Futures Commission (SFC) had not acted in the public interest because it had failed to take into account Winnie Ho's ongoing legal challenges against the transfer of assets from STDM to SJM for the Hong Kong IPO.
The judge said he would make a decision on the case at 4 p.m. (0800 GMT) on Wednesday. But he added that the Stock Exchange of Hong Kong and the SFC had the right to approve or reject listing applications by companies, given the full disclosure of firms, and that it was up to the public to decide whether to invest.
The judge also asked why Winnie Ho had filed the judicial review at the last minute if it was based on the public interest.
SJM, which also competes with Wynn Resorts, Galaxy Entertainment and Melco PBL Entertainment, is one of six licensed gaming operators in Macau.
At the end of 2007, it owned 18 of the 28 casinos in the former Portuguese enclave, with 1,412 tables and 3,702 slot machines.