Las Vegas Sands (LVS) announced Wednesday that it has agreed to sell its Las Vegas properties for about $6.25 billion as it turns its focus to its Asia operations. LVS stock rose.
Apollo Global Management (APO) will acquire Las Vegas real property and operations, including The Venetian Resort Las Vegas and the Sands Expo and Convention Center for approximately $1.05 billion in cash and $1.2 billion in seller financing in the form of a term loan credit and security agreement. Meanwhile, VICI Properties will acquire subsidiaries that hold the real estate and real estate-related assets of The Venetian for approximately $4 billion in cash.
Before his death on Jan. 11, Las Vegas Sands founder and CEO Sheldon Adelson had discussed selling the Las Vegas properties. Covid-mandated shutdowns, which decimated Las Vegas casinos with reduced travel and hotel occupancies, may have accelerated plans.
“Asia remains the backbone of this company, and our developments in Macao and Singapore are the center of our attention,” said chairman and CEO Robert Goldstein in a news release.
COO Patrick Dumont added: “Our long-held strategy of reinvesting in our Asian operations and returning capital to our shareholders will be enhanced through this transaction.”
Despite its name, the majority of Las Vegas Sands’ revenue has come from Macau for several years.
CEO Goldstein said there is still “potential development opportunities domestically.” Las Vegas Sands has been lobbying New York and Texas lawmakers to allow casinos in their states. The company is also looking at expanding into online gambling, COO Dumont added.
Shares rose 1% to 65.63 on the stock market today. LVS stock broke out of a flat base with a buy point of 60.98 on Feb. 22, according to MarketSmith chart analysis. Shares are extended past the 5% buy range.
Las Vegas Sands’ relative strength line has been trending upward lately. As Covid-19 infections decline and more people get vaccines, there is hope for casinos to reopen more fully.
Among other casino and gambling stocks, MGM Resorts (MGM) edged up 1.1%, Caesars Entertainment (CZR) rose 4%, Bally’s (BALY) was up 0.8%, DraftKings (DKNG) climbed 3% and Penn National Gaming (PENN) was down 0.8%.
Please follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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