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Adelson’s Las Vegas Sands Exploring $6 Billion Sale of Vegas Casinos

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Adelson’s Las Vegas Sands Exploring $6 Billion Sale of Vegas Casinos

  • Company says it is just the early stages of a sale process
  • The U.S. is a small and shrinking part of company revenue
People pass the Palazzo at the Venetian Resort in Las Vegas, on Oct. 18.
People pass the Palazzo at the Venetian Resort in Las Vegas, on Oct. 18. Photographer: Roger Kisby/Bloomberg
People pass the Palazzo at the Venetian Resort in Las Vegas, on Oct. 18.
Photographer: Roger Kisby/Bloomberg

Sheldon Adelson’s Las Vegas Sands Corp. is exploring the sale of its casinos in Las Vegas, according to people with knowledge of the matter, a move that would leave the mogul focused on Asia and mark his exit, for now, from the U.S. gambling industry.

The world’s largest casino company, Sands is working with an adviser to solicit interest for the Venetian Resort Las Vegas, the Palazzo and the Sands Expo Convention Center, which together may fetch $6 billion or more, said the people, who asked to not be identified because the talks are private. The properties are all connected along the city’s famous strip.

A representative for Las Vegas Sands confirmed it was in very early discussions about a sale and that nothing has been finalized.

A sale would concentrate Sands’ casino portfolio entirely in Macau and Singapore, two larger casino markets for Adelson, who ranks as one of the world’s richest people, with a fortune estimated at $29.7 billion. The U.S. was already a small and shrinking part of his business, accounting for less than 15% of revenue last year.

“The growing insignificance of the U.S. market explains to you why Las Vegas Sands is looking to offload their U.S. properties,” said Ben Lee, a Macau-based managing partner at IGamiX. “It is 15% of revenue but 80% of regulatory pain and burden.”

A recovery in Asia helped improve Sands’ operating results in the third quarter, Adelson said in an earnings call last week. In Singapore, Marina Bay Sands had a profitable quarter as operations progressively resumed across the resort during the summer.

Las Vegas Sands Soars on Signs Macau Gamblers Are Returning

The money from a sale could allow the company to fund other development opportunities. Sands dropped out of the competition to build a casino in Japan earlier this year due to terms executives described as unfavorable. Adelson, 87, has expressed interest in building in New York City, an opportunity that could arise next year.

The stock rose as high as 12% in after-hours trading Monday after Bloomberg reported on the news of the deal. The shares had closed down 3.1% to $49.13.

Makes Sense

With the global pandemic creating uncertainty in the Las Vegas convention business and an implied price for the properties of 12 times earnings before interest, taxes, depreciation and amortization, a deal could make sense, Ben Chaiken, a Credit Suisse analyst, wrote in a research note late Monday. He added the caveat that it’s not clear who would buy the casinos.

Key Speakers At CLSA Japan Forum

Sheldon Adelson

Photographer: Kiyoshi Ota/Bloomberg

Adelson is chairman, chief executive officer and the majority shareholder of Las Vegas Sands, which has a market value of $37.5 billion.

Casinos in Macau, the world’s biggest gambling market, generated 63% of the company’s $13.7 billion in revenue last year, before the pandemic struck. Covid-19 has devastated the casino industry, as it has other businesses where people gather in large numbers, like movie theaters, concerts and restaurants. Singapore was second at 22%.

Las Vegas Sands surged on the prospect of a casino deal

Sands is expanding in both regions, with Macau alone earmarked for $2.2 billion in spending.

What Bloomberg Intelligence Says

“The possible sale of its Las Vegas assets for $6 billion could fund those Asian projects, while $6.3 billion of existing liquidity would be enough to sustain idle operations for 17 months. China’s lifting of restrictions on visas should benefit Sands in Macau.”

Brian Egger, senior gaming and lodging analyst

Macau’s recovery from Covid-19 curbs has been slow after China gradually lifted travel restrictions and formed a travel bubble with the gambling hub. Mainland Chinese visitor arrivals during China’s Golden Week holiday in early October were down 84% from a year earlier. However, there are signs gamblers are starting to return in volume as a visa backlog clears.

Adelson Cashing Out of Vegas Would Come at Trying Time for City

“We are seeing an uptick in real tourists on the ground in Macau,” said Lee. “The profile of the Chinese tourists is dominated by young females and families -- mainlanders taking advantage of the cheap accommodation on offer.”

— With assistance by Angus Whitley, and Jinshan Hong

(Updates with analyst comment and Macau background beginning in fifth paragraph)