Las Vegas Sands told investors a week ago that the company might have an interest in acquiring existing casinos, but that its focus would be on Asia.
Company Chairman and CEO Sheldon Adelson, Las Vegas Sands’ largest shareholder, didn’t offer specifics about potential acquisitions, which came in response to questions from analysts on the casino operator’s first-quarter earnings conference call.
Adelson said Las Vegas Sands wasn’t moving away from developing integrated resorts; the company is spending $5.5 billion to expand its properties in Macau and Singapore, and is planning to bid for the right to build an integrated resort in Japan. But Adelson said the company has enough funds on its balance sheet to consider potential casino purchases.
“I’m not going to give up on developing integrated resorts,” Adelson said. “I’m going to add on to our strategic thinking or strategic priorities that we can acquire … one or more operations.”
Adelson said, “of course, the price has to be right,” later adding, “if we can find something good in Asia, we’d certainly like to do that.”
Las Vegas Sands had $2.6 billion in cash as of March 31 and access to almost $4 billion through its credit lines.
In response to a second question on the same issue, Las Vegas Sands CFO Patrick Dumont said the company was looking to be opportunistic.
“We are looking to see high-quality assets where they are in key markets where it may be cheaper to buy them (than) to build, and you may find something that is attractive and fits into our overall strategy in the long run,” Dumont said.
Las Vegas Sands’ two Strip resorts, Venetian and Palazzo, have been closed since March 17 due to the COVID-19 coronavirus pandemic. A timeline for reopening is still in question. The company’s Marina Bay Sands in Singapore has been closed since early April as the island nation deals with the pandemic.
Las Vegas Sands is spending roughly $12 million a day to maintain the properties, which includes paying wages and benefits for displaced workers during the closures. The company has suspended its quarterly dividend payment for at least the rest of the year, which could free up another $3 billion annually.
The company endured business disruptions to its Macau holdings, where the pandemic curtailed the Chinese New Year celebrations in January and closed casinos for 15 days in February.
Analysts viewed the Las Vegas Sands’ acquisition talk as “a new twist” since the company has primarily been an integrated resort developer.
Last year, the company sold its Sands Bethlehem property in Pennsylvania to Alabama’s Poarch Band of Creek Indians for $1.3 billion. The property is now called Wind Creek Bethlehem.
Stifel Financial gaming analyst Steven Wieczynski told investors he agreed with the company’s estimation of its balance sheet, saying it “creates opportunities to be a buyer in times when competitors may be in dire need of liquidity.”
Deutsche Bank gaming analyst Carlo Santarelli said any operator targeted by Las Vegas Sands would have an Asian focus, but would also be “large enough to move the needle” and be a “solid strategic fit.”
Shares of Las Vegas Sands, traded on the New York Stock Exchange, closed at $46.38 on Monday, up $2.60 or 5.94%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
