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Bloomberg
Sands sells Vegas hotels to Apollo, Vici for $ 6.25 billion
(Bloomberg) – Las Vegas Sands Corp., the world’s largest casino operator by market value, has agreed to sell its properties in Las Vegas to Apollo Global Management Inc. and Vici Properties Inc. for $ 6.25 billion dollars, refocusing the company on its Asian resort success and other potential opportunities in the United States, the pollo will manage the properties, which will be owned by Vici, a real estate investment trust, the companies said in a statement Wednesday. The Venetian, Palazzo and related convention centers in Vegas contributed less than 15% of the company’s revenue in 2019, before the coronavirus pandemic hit. Sands rose 2.8% to 66.77 $ in New York trading, while Apollo gained 2% to $ 50.90 Vici rose 2.3% to $ 29.12. The shares of Sands China Ltd. changed little from 10 a.m. in Hong Kong. Sands reported last year that she no longer viewed Las Vegas, her homeland, as a priority when she brought in advisers to solicit interest in properties. The company has identified more than $ 5 billion in capital spending plans at its complexes over the next five years, most focusing on Macau and Singapore, which generated 85% of its revenue in 2019. ” This company is focused on growth, and we see significant opportunities on a variety of fronts, ”said Sands CEO Robert Goldstein. “Asia remains the backbone of this company and our developments in Macau and Singapore are the center of our attention.” The company is also playing a role in the growing field of online gambling, which its late founder, Sheldon Adelson, has avoided on moral grounds. Adelson died in January. Apollo, a private equity giant, is betting on a quick return to America’s gambling mecca as the pandemic unfolds. He plans to market the high-end resort more specifically to gamers and offer consumer links through some of the other companies in his portfolio. Additionally, the station could serve as a focal point for the rapidly growing sports betting business in the United States. The investment “underscores our belief in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and around the world. the world, ”Apollo partner Alex van Hoek said in a statement. Apollo recently invested in gambling companies including Great Canadian Gaming Corp., one of the largest casino companies in this country, and European lottery operator Sazka Group. along with TPG, also owned for several years Caesars Entertainment Corp., which the companies privatized in a top-of-the-market $ 30.7 billion debt buyout in 2008. The company has struggled for years under its debt before the investors sold out. Vici was sold to Caesars debt holders as part of a restructuring. Vici will buy the Venetian’s real estate and related assets for around $ 4 billion in cash. The sale of the Vegas properties would mark Sands’ exit from the US gambling industry for now. The Venetian, Palazzo, and Sands Expo Convention Center are all connected along the city’s famous Strip. They were already a small part of the shrinking business, however, and the Las Vegas convention sector was hit particularly hard by the coronavirus and associated restrictions on large gatherings. company to finance other development opportunities. Sands dropped out of the competition to build a casino in Japan last year due to conditions that executives called unfavorable. But the company has expressed interest in building in New York City, which may consider an increase in the number of casinos it licenses. Texas is seen as another potential growth market, although some prominent lawmakers have repeatedly voiced their opposition to legalizing casinos. Sands is the only major US operator that does not have a nationwide sports or online betting business. Goldstein, its CEO, has held talks with potential partners, which may be more focused on the cash proceeds from the sale. Keeping Headquarters Sands intends to keep its headquarters in Las Vegas. The Adelson family, now led by Sheldon’s widow Miriam, will also maintain a presence through their ownership of the city’s largest newspaper, the Las Vegas Review-Journal. Miriam’s son-in-law, Patrick Dumont, is the president of Sands. The company may consider resuming its dividend, share buybacks and debt repayments, especially when its business in Asia picks up. Sands funds $ 1.2 billion of the purchase price of Apollo with a six-year note that starts at 1.5% interest and increases to 4.25% after three years, according to people familiar with the terms . Goldman Sachs Group Inc. acted as financial advisor to Las Vegas Sands in the latest agreement. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel. Leholdon Adelson was a strong supporter of the resort concept that linked the meeting space of business travelers to casinos. A longtime entrepreneur who made his first serious fortune in the salon business, he built the Sands Convention Center and its connected hotels, later copying the formula overseas. But he was also able to part ways with his developments, as he has done in the past with the Venetian’s Grand Canal Shoppes in Las Vegas and a casino in Pennsylvania. The current agreement “will pay homage to Mr. Adelson’s legacy while starting a new chapter. in the history of this company, ”said Goldstein. (China Sands stock updates in third paragraph.) For more articles like this, please visit us at bloomberg.com
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