SJM to buy L’Arc Hotel, but won’t proceed with purchase of Casino Ponte 16
JP Morgan says US$880m price tag offers ‘attractive valuation’
SJM Holdings has decided to buy one of its remaining satellite casinos, L’Arc Hotel, for around US$800m, but will not proceed with the purchase of Casino Ponte 16.
L’Arc Hotel is a well-established hotel property located in the NAPE district on Avenida 24 de Junho, a key node within the Macau Peninsula’s most concentrated and high-performing entertainment and hospitality cluster. The property has a gross floor area of approximately 86,438 square metres and encompasses hotel accommodation, food and beverage outlets, retail and the premises of Casino L’Arc Macau, which SJM Resorts currently operates under a services arrangement.
The transaction involves SJM Holdings’ subsidiaries, SJM-Investment Limited and SJM Resorts, acquiring 100 per cent of the issued share capital from its current owners, Goldarch Holdings Limited and Solar King Investments.
Daisy Ho, Chairman and Executive Director of SJM Holdings Limited, commented, “L’Arc Hotel is centrally located within the active cluster of gaming, hospitality and visitor traffic on the Macau Peninsula, where the combined pull of surrounding landmarks and attractions creates opportunities that few locations can match. With the casino currently operating below its full potential, we see considerable room for growth as part of a stronger, integrated network under SJM Resorts. 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. Our priority is to ensure a smooth transition for employees and to continue contributing to Macau’s tourism economy.”
By securing a prime location within the city’s most commercially productive entertainment cluster and enhancing its foothold in this high-density catchment area, SJM Resorts is better placed to retain geocentrically loyal customers in the Macau Peninsula, unlocking deeper synergies across its Lisboa-branded properties, improving customer circulation and broadening market reach. Over the long term, SJM Resorts remains fully committed to strengthening the Peninsula’s urban fabric, enhancing the quality of tourism offerings and advancing Macau’s further development as a “World Centre of Tourism and Leisure”, contributing to the city’s sustainable growth and long-term prosperity.
Analysts at JP Morgan said: “Our back-of-the-envelope math suggests L’Arc could be generating HK$300m to HK$350m (US$38.5m to US$45m) per annum in EBITDA as a self-run casino at current GGR levels -implying a ~20 per cent margin on HK$1.6bn to HK$1.7bn (US$205m to US$218m) in total revenues (including non-gaming).”
“Potential upside exists if SJM ramps up additional tables, as L’Arc can physically accommodate 90 to 100 tables.”
The decision not to buy Casino Ponte 16 was reached after a thorough assessment of long- term business planning, commercial considerations and resource prioritisation across the Group’s portfolio. This outcome reflects the Company’s disciplined approach to capital deployment and its focus on strengthening core operations in line with market developments and the Group’s long term development strategy.
