Sands to Sell Las Vegas Properties for $6.25 Billion to Apollo Global, REIT--Update
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
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
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
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
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
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 email@example.com
(END) Dow Jones Newswires
March 03, 2021 11:05 ET (16:05 GMT)
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