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As discussed in our 5/15 note, "LVS: A QUICK LOOK AT MACAU IPO", we concluded that an IPO was a good idea in principle but timing may not be imminent.  Assembling the appropriate Board of Directors may be the most important impediment to a timely listing.  The following are some pertinent Hang Seng regulations for issuers:

  • Every board of directors of a listed issuer must include at least three independent non-executive directors
  • At least one of the independent non-executive directors must have appropriate professional qualifications or accounting or related financial management expertise.
  • Every listed issuer shall appoint two authorized representatives who shall act at all times as the listed issuer's principal channel of communication with the Exchange. At least one must be a director (the other being the issuer's secretary).
  • The authorized representatives must be the principal channel of communication between the Exchange and the listed issuer and to supply the Exchange with details in writing of how he can be contacted including home and office telephone numbers and, where available, facsimile numbers.
  • If/when they leave HK, suitable alternates must be appointed, available and known to the Exchange and to supply the Exchange with details in writing of how such alternates may be contacted including their home and office telephone numbers and, where available, facsimile numbers

If they choose the Macau PO route, LVS will be forced to maintain a BOD that may be a bit more independent than what Chairman Sheldon Adelson is accustomed to.  Furthermore, at least one director must be permanently situated in Hong Kong.  As one of my Macau consultants put it to me this morning, "LVS is going to need to recruit some real heavyweights to make this work."  The Hong Kong business elite tend to stick together.  While based in Macau, Stanley Ho can certainly be considered one of the elite.  Is it a coincidence that Sheldon has been "making nice" with Ho as of late?

The bottom line is that an IPO is a very viable option for LVS but Sheldon needs to play his cards right.  This could take some time.