Brokerage JP Morgan Securities (Asia Pacific) states that there is no reason to worry about the impact of the letter sent by Asian American Entertainment Corp (AAEC) to the Macau gaming tender commission
In the letter, first reported by TDM Canal Macau TV, AAEC urges the tender commission to look into the financial capacity of the Sands China-linked subconcession holder to bid for a local gaming concession, in case AAEC wins the appeal it has lodged to the Court of Second Instance, after the city’s Court of First Instance ruled in favour of Las Vegas Sands Corp (LVS).
AAEC, led by Taiwan businessman Marshall Hao, was seeking compensation of at least MOP60 billion (US$7.5 billion) plus extra from three affiliates of the US gaming company over claims of breaching their partnership arrangement in a bid for a Macau gaming concession two decades ago.
“We are not worried about this headline, and we’d accumulate Sands China – our top pick in Macau–on dips”
A note by JP Morgan’s head of Asia Gaming, Leisure and China Software research DS Kim indicates that the initial market reaction on October 13 was “very undone” and recalled that the SAR’s Court of First Instance “ruled against AAEC & unanimously dismissed its claim sentencing the plaintiff for litigation in bad faith who acted with intent by distorting the facts”.
While noting that they “cannot speculate on the outcome of
the lawsuit/appeal”, DS Kim stresses that the news of the letter that made some headlines earlier in the week “has nothing to do with what the government thinks/says.”
