LVS move to focus on Asia welcomed by analysts

The Las Vegas Strip properties are likely to be valued at US$6bn.
The Las Vegas Strip properties are likely to be valued at US$6bn.

Industry experts believe the move could be beneficial for Adelson’s company.

US.- Industry analysts appear to approve following confirmation that the American gaming conglomerate Las Vegas Sands (LVS) is studying the sale of its flagship properties on the Las Vegas Strip to focus its energy on Asia.

Sheldon Adelson’s company has various opportunities in Asia, including a potential IR bid in Japan.

If the deal goes ahead, it is likely to be through a real estate investment trust (REIT), allowing the company to maintain a US presence. Under such a scheme, the properties at stake would be valued around US$6 billion, IAG reported.

This would suit LVS, according to Bernstein analysts Vitaly Umansky, Kelsey Zhu and Tianjiao Yu.

“If Sands were to see a buyer at a US$6 billion valuation for its Las Vegas assets, we would expect LVS to likely agree to such a sale,” they said. “The outcome would be both near-term and long-term benefit to shareholders as it would allow for potentially higher ROI investment in Asia and/or faster return of capital to shareholders.”

Morgan Stanley’s Thomas Allen said the US$6 billion deal would be around 12 times the company’s 2019 EBITDA on the assets.

He said: “We are not sure how much interest from strategic buyers there might be given the high absolute price, other reportedly available assets on the Strip, and the unique positioning of the properties.

“However, given the potential for a cheaper OpCo price through a sale leaseback and historically relatively steady EBITDA, there could be other interest.”

IAG quoted another anonymous analyst that pointed out that the move could benefit LVS for the tendering of Macau’s casino licences in 2022, as the company would be seen as “less American”.

While Las Vegas struggles to recover from the impact of the Covid-19 pandemic. LVS’s Singapore operation, Marina Bay Sands, turned positive figures in the third quarter.

LVS is to spend $3.3bn on a new luxury tower at the Singapore property. It is also spending $1.35bn to rebrand Sands Cotai Central as the Londoner.

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