Las Vegas Sands Corp. on Wednesday announced it has agreed to sell its Las Vegas properties, the Venetian and Palazzo resorts, as well as the Sands Expo and Convention Center, to Apollo Global Management and real-estate investment trust Vici Properties for about US$6.25 billion. Apollo is reportedly paying US$2.25 billion for Venetian’s operating company and Vici is buying the land and real estate assets for the remaining US$4 billion.
After the death of founder Sheldon Adelson in January, Sands executives said the company would continue to invest in its more lucrative Singapore and six Macau casinos, which generate most of the company’s revenue. Sands plans to keep its headquarters in Las Vegas as it looks at expansion opportunities in New York and Texas. It will also consider opportunities in online gambling.
Under terms of the deal, New York-based Apollo, founded by real estate investor and former CEO Leon Black, would pay US$1.05 billion in cash and US$1.2 billion in seller financing in the form of a term loan credit and security agreement. New York-based Vici, a real estate investment trust affiliated with Caesars Entertainment, would pay US$4 billion.
Joseph Greff, a gaming industry analyst with New York-based J.P. Morgan, said in a report to investors that Las Vegas Sands made a great deal. “From our perspective, this is a great price, higher than the US$3.7 billion of value we ascribe [and] … would add US$2.5 billion, or US$3.31 of incremental equity value per share,” Greff said in a report to investors. “As such, we don’t think Las Vegas Sands left any value on the table.”
Apollo, a private equity firm, said the purchase is a major bet on Las Vegas, which has seen its tourism numbers and conference business drastically decline over the past year because of the pandemic. “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,” it said.
LVS Chief Executive Robert Goldstein commented on the sale by saying, “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. Asia remains the backbone of this company, and our developments in Macau and Singapore are the center of our attention.”