Macau casino operator SJM Holdings Ltd announced on Thursday it has agreed to spend HKD1.75 billion (US$224.8 million) to acquire L’Arc Hotel (pictured), a downtown property that is the host venue for one of its satellite gaming venues, Casino L’Arc Macau.
SJM Holdings said L’Arc Hotel was part of a “core peninsula cluster”. The company’s own Casino Lisboa and associated Hotel Lisboa – and the group’s Grand Lisboa property – , are close to L’Arc Hotel.
“With the casino [L’Arc Macau] currently operating below its full potential, we see considerable room for growth as part of a stronger, integrated network under SJM Resorts,” said chairman of SJM Holdings, Daisy Ho Chiu Fung, in prepared remarks cited in the Thursday announcement.
Ms Ho was also attributed as stating: “This acquisition will allow us to enhance coordination across our peninsula properties in a unified structure that enhances operational efficiency and unlocks cross-promotional synergies.”
The same day, SJM Resorts Ltd, the casino licence holder in the SJM group, said it would not after all acquire another satellite casino business it had mentioned it might take on: Casino Ponte 16 at the Ponte 16 resort in the Inner Harbour district.
The L’Arc deal, clinched on Thursday, will see L’Arc Hotel acquired from two British Virgin Islands-incorporated entities, Goldarch Holdings Ltd and Solar King Investments Ltd. Each is indirectly wholly-owned by Angela Leong On Kei, a co-chairman and an executive director at SJM Holdings. She was also the fourth consort of SJM Holdings’ late founder Stanley Ho Hung Sun.
As a result of the acquisition, Casino L’Arc Macau will no longer be managed under a service agreement as a satellite casino, and it will be absorbed into SJM Holdings’ core gaming operations as a self-owned and self-operated gaming venue.
The acquisition is subject to approval by SJM Holdings’ independent shareholders, as well as regulatory approvals from relevant Macau authorities, according to the Thursday announcement and a filing lodged with the Hong Kong Stock Exchange.
It is anticipated that the deal will be completed on December 18.
A principal liability of L’Arc Hotel is an outstanding bank loan of nearly HKD1.93 billion, according to Thursday’s statement.
Under the terms of the transaction, SJM Holdings will pay an aggregate amount of HKD1.75 billion for the acquisition of L’Arc Hotel, comprising a nominal purchase price for the issued shares of the holding company and the repayment of a portion of the outstanding loan.
The shortfall on the outstanding loan – circa HKD177.53 million – is to be borne by the vendors, funded through a loan to be provided by SJM Resorts under a separately-executed loan agreement.
