Investment bank JP Morgan says the HKD1.75-billion (US$224.8-million) price that casino operator SJM Holdings Ltd has agreed to pay for the L’Arc Hotel complex “looks attractive”, given its “prime location” on the Macau peninsula.
The L’Arc Hotel (pictured) is a downtown property that is the host venue for one of the SJM group’s satellite gaming venues, Casino L’Arc Macau.
On Thursday, SJM Holdings said L’Arc Hotel was part of a “core peninsula cluster”. The company’s own Casino Lisboa and associated Hotel Lisboa, as well as the group’s Grand Lisboa property, are close to L’Arc Hotel.
The deal for L’Arc Hotel is due to be completed on December 18. As a result, 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, the casino firm said.
In a separate Thursday announcement, the SJM brand 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 complex in the Inner Harbour district, is set to cease operating on November 28.
JP Morgan said in a Thursday memo that the acquisition price for the L’Arc complex “looks attractive” and represented a “good deal” for the casino group.
“L’Arc offers 283 rooms – plus small retail, car parking, etc –, so [the] HKD1.75-billion price tag equates to HKD6.2 million or US$0.8 million per key – an attractive valuation, especially given its prime location on the peninsula,” wrote analysts DS Kim, Selina Li, and Lindsey Qian.
They added: “We don’t think any major renovation is necessary either, as room quality and offerings are somewhat comparable to SJM’s existing peninsula properties.”
EBITDA, costs
While L’Arc’s total revenue and earnings before interest, taxation, depreciation, and amortisation (EBITDA) aren’t disclosed, the JP Morgan team said SJM’s management indicated the property “generated circa HKD1.4 billion and HKD1.3 billion” in gross gaming revenue (GGR) for respectively 2024 and the first 10 months of 2025, from 45 gaming tables.
“Our back-of-the-envelope math suggests L’Arc could be generating HKD300 million to HKD350 million per annum EBITDA as a self-run casino, at current GGR levels, implying a circa 20-percent margin on HKD1.6 billion to HKD1.7 billion plus in total revenues, including non-gaming,” stated the analysts.
They added: “Potential upside exists if SJM ramps up additional tables, as L’Arc can physically accommodate 90 to 100 tables.”
According to JP Morgan, the acquisition of L’Arc “could lift SJM’s 2026 EBITDA by 8 to 9 percent at its current run-rate, with further upside if SJM executes strongly with additional table deployment”.
In a Thursday release, Macau’s casino regulator – the Gaming Inspection and Coordination Bureau – said SJM’s request take over the operations at Casino L’Arc Macau would be “assessed in accordance with existing legislation”.
The regulator also said it would maintain “close communication” with the city’s Labour Affairs Bureau regarding SJM’s pledged relocation of the “1,025 workers” employed at Casino Ponte 16.
The JP Morgan analysts said in their recent note: “We view the move to walk away from Ponte 16 casino as prudent, but we’re somewhat disappointed – though not surprised – by the plan to retain all 440 tables after the satellite closure.”
They added: “We remain sceptical that SJM can fully optimise these additional tables, and it’s unclear whether this move will be EBITDA accretive, given the estimated HKD1.0 billion to HKD1.2 billion incremental operational spending burden, i.e., direct payroll for dealers and gaming staff tied to the 440 tables.”
The closure of Casino Ponte 16 will leave three satellites remaining in Macau, all of them under SJM licensing. They are: Casino Landmark, Casino Kam Pek Paradise, Casino Fortuna.
