LVS Las Vegas Sands Corp

By Dave Sebastian 

Las Vegas Sands Corp. agreed to sell its Las Vegas properties to Apollo Global Management Inc. and a real-estate investment trust for about $6.25 billion as the casino operator exits the gambling hub to focus on its core Asia operations.

Sands' sale of the Venetian Resort and its convention center comes as the Covid-19 pandemic has roiled the casino industry with temporary shutdowns, reduced travel and limited occupancies. Hopes for a recovery this year depend on how many tourists and business travelers will return following the distribution of vaccines.

The casino operator had said in October that it was considering a sale of the Vegas assets. After the death of founder Sheldon Adelson in January, Sands executives said the company would continue to invest in its Singapore and Macau casinos, which generate most of the company's revenue.

"As we announce the sale of the Venetian Resort, we pay tribute to Mr. Adelson's legacy while starting a new chapter in this company's history, " Chief Executive Robert Goldstein said Wednesday. "Asia remains the backbone of this company, and our developments in Macau and Singapore are the center of our attention."

Sands plans to keep its headquarters in Las Vegas, a company spokesman said. The company has been considering expansion opportunities in New York and Texas, Sands executives have said, and it will also explore opportunities in online gambling.

Shares of Sands hit a 52-week high Wednesday and recently rose 1.3% to $65.80. The sale could lead Sands to return some of that money to shareholders, likely through dividends, which had been paused since last year, Jefferies analyst David Katz said.

Apollo said it sees the Las Vegas properties as having exposure to categories positioned for recovery and long-term growth, such as hospitality, meeting events, gaming and entertainment.

"This investment also underscores our conviction in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and across the world," Apollo partner Alex van Hoek said.

Apollo has previously invested in Vegas casinos. In 2008, Apollo and TPG completed a $30 billion leveraged buyout of Harrah's Entertainment Inc., which loaded the company with debt on the eve of Las Vegas's longest and deepest recession. The company renamed itself Caesars Entertainment Corp. and, in 2015, filed for bankruptcy protection of its largest unit, which had $18 billion in debt.

Apollo recently has been increasing its bets on the gambling industry. The private-equity giant agreed to buy Canadian casino operator Great Canadian Gaming Corp. in November and eyed U.K. bookmaker William Hill PLC last year before deciding against making an offer.

Under the Sands deal, funds tied to Apollo will buy subsidiaries that hold the operating assets and liabilities of Sands' Las Vegas business for about $1.05 billion in cash and $1.2 billion in seller financing in the form of a term loan credit and security agreement, Sands said. REIT Vici Properties Inc. will buy subsidiaries that hold the real-estate and real-estate-related assets of the Venetian for about $4 billion in cash.

The Apollo funds will also enter into a long-term lease pact with Vici for the properties, the companies said.

The Venetian resort comprises a 35-story hotel tower with some 3,000 suites, a 12-story tower with about 1,000 suites and the 50-story Palazzo Tower, which has about 3,000 suites, according to its 2019 annual securities filing. The resort has about 225,000 square feet of gambling space, the company said in the filing.

The Sands Expo and Convention Center has about 1.2 million gross square feet of exhibit and meeting space, the company said. It also has about 1.1 million square feet of meeting and conference facility that links the center with the Venetian resort.

The Sands and Mr. Adelson have long been connected with Las Vegas.

Mr. Adelson launched Computer Dealers Exposition, or Comdex, which became a hugely successful trade exhibit held in Las Vegas and other cities. In 1988, needing space for his own exhibition center in Las Vegas to accommodate growing crowds, he bought the Sands hotel and casino on the Las Vegas Strip for $110 million, opening up a new line of business. His bet was that conventions and trade shows were a surer way to keep rooms filled than a pure focus on gambling.

He tore down the Sands and built in its place the Venetian resort, featuring a canal replica with singing gondoliers.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

March 03, 2021 11:05 ET (16:05 GMT)

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