Las Vegas Sands Corp. confirmed Monday it was in preliminary talks with an advisor that could lead to a sale of its Las Vegas Strip gaming and convention operations in a deal valued at $6 billion.
Bloomberg News first reported that the casino company was soliciting interest from potential buyers. After the reports surfaced, Las Vegas Sands spokesman Ron Reese said in an emailed statement, “The company confirmed very early discussions have taken place, but nothing has been finalized.”
Las Vegas Sands is controlled by billionaire Sheldon Adelson, 87, who serves as chairman and CEO. Adelson and his wife, Dr. Miriam Adelson, own 58% of the operation, which got its start in 1987 with the purchase of rat pack-era Sands Hotel-Casino on the Strip for $187 million.
Adelson is currently No. 19 on the Forbes 400 with a net worth of $31.8 billion.
On the Strip, the company’s Venetian and Palazzo resorts and the Sands Expo and Convention Center cover 63 acres and includes 7,000 hotel rooms, more than 200,000 square feet of casino space, and 1.7 million square feet of convention facilities. Las Vegas Sands also owns 19 acres east of the Strip where Madison Square Garden is building the $1.7 billion MSG Sphere, an entertainment complex.
Sheldon and Miriam Adelson
It’s unclear if the company was seeking an outright sale of its Las Vegas holdings or a potential deal with a real estate investment trust that would include a lease-back of the operations to Sands management.
Last year, MGM Resorts International completed two sale and lease-back transactions with REITs covering three Strip properties – Bellagio, MGM Grand, and Mandalay Bay – in which the company netted proceeds of $8.2 billion.
Credit Suisse gaming analyst Ben Chaiken told investors Monday it was unknown who would be the buyer.
“With uncertainty in Las Vegas conventions, and an implied greater-than 12-times multiple, this could make sense given (the) portfolio was trading below this even pre-COVID-19,” Chaiken wrote in a brief investor note.
Las Vegas Sands has a market capitalization value of $37.5 billion. Shares of the company jumped more than 3% in after hours trading following the Bloomberg report.
In 2019, Las Vegas Sands reported overall net revenue of $13.74 billion, with just $1.82 billion coming from its Strip resorts. The company business operations in Macau, including six casino resorts, reported $8.81 billion in total revenues. The Marina Bay Sands in Singapore accounted for $1.8 billion in revenue.
The coronavirus pandemic has altered that dynamic, with the company’s Las Vegas resorts out-pacing Las Vegas Sands’ Macau holdings for the first nine months of the year.
In the company’s third quarter earnings call last week, Adelson was bullish on Macau’s recovery from the pandemic and said the company was committed to spending $2.2 billion on renovations and expansions to its properties, including the transformation of Sands Cotai Central into the Londoner Macau, a London-themed resort.
At the end of September, Sands balance sheet had $2.38 billion in cash, $3.95 billion in available credit, and $13.89 billion in debt.
Bloomberg speculated funds from any sale could support other development opportunities. Las Vegas Sands dropped out of the competition to build a casino in Japan earlier this year, while Adelson has expressed interest in building an integrated resorts complex in New York City, an opportunity that could arise next year.
Adelson and his wife are considered megadonors to Republican candidates and GOP causes. In August, the Adelsons gave $75 million to a super PAC supporting the re-election of President Donald Trump.
According to OpenSecrets.org, Adelson and his wife set a new record for donations from individuals in a single election cycle, giving $172.7 million.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
