Las Vegas Sands puts $6 billion price-tag on Strip properties

The organisation's estate consists of the Venetian and Palazzo resorts, the Sands Expo and Convention Center, and 19 acres where the MSG Sphere is being built

Preliminary talks between Las Vegas Sands Corporation and an investor could lead to the sale of the Las Vegas Strip Gaming and Convention operations in a deal worth in the region of $6 billion. This was first reported by news outlet Bloomberg News that the casino company was enticing interest from potential buyers. Such was then confirmed by spokesman Ron Reese on behalf of Las Vegas Sands through an email statement outlining that “The company confirmed very early discussions have taken place, but nothing has been finalized.”

Las Vegas sign realChairman and CEO Mr Sheldon Adelson and his wife Dr. Miriam Adelson possess 58% of the operation, which saw its emergence back 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.

The organisation's outlets consist of the Venetian and Palazzo resorts and the Sands Expo and Convention Center which cover 63 acres of the strip and includes 7,000 hotel rooms, more than 200,000 square feet of casino space, and 1.7 million square feet of convention facilities. It is also noted that Las Vegas Sands possesses 19 acres east of the Strip where Madison Square Garden is building the $1.7 billion MSG Sphere.

Presently, it is not clear whether the company is seeking a straight sale of its holdings or just a potential deal with a real estate investment trust which would consist of a lease-back of operations to Sands management.

During 2019, the MGM Resorts International secured two sale and lease-back transactions with REITs covering three Strip properties including the Bellagio, MGM Grand, and Mandalay Bay which saw MGM Resorts International netting proceeds adding up to $8.2 billion.

Ben Chaiken, a Credit Suisse gaming analyst advised investors last Monday that it is currently unknown Sheldon Adelsonwhom the potential buyer is. Chaiken continued to outline within a brief investor note: “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.”

The market capitalization share of Las Vegas Sands is worth a total value of $37.5 billion. Company shares increased by more than 3% during after-hours trading following the Bloomberg report.

2019 saw a reported overall net revenue of $13.74 billion with just $1.82 billion coming from its Strip resorts (Las Vegas Sands). Operations in Macau, that consist of six resort casinos documented a total revenue amounting to $8.81 whilst the Singapore based Marina Bay Sands accounted for $1.8 billion in revenue.

The COVID-19 pandemic has drastically changed that dynamic as the company’s Las Vegas resorts out-pacing Las Vegas Sands’ Macau holdings for the first nine months of the year. During a call last week concerning the company’s third-quarter earnings, Adelson was optimistic that Macau would recover from the pandemic and outlined that the company was willing and committed to injecting $2.2 billion to be spent on renovations and expansions to its properties, including the transformation of Sands Cotai Central into the Londoner Macau, a London-themed resort.

Additionally, Bloomberg contested that funds generated from any sale could assist other development opportunities. However, Las Vegas Sands dropped out of the competition to build a casino in Japan during 2020, while Adelson has also expressed interest in building an integrated resorts complex in New York City.

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