Sands Inks Deals To Sell Las Vegas Properties For $6.25B

Las Vegas Sands announced the sale of its Las Vegas real estate properties and operations, for an aggregate $6.25 billion, as the casino operator shifts investments to Asia and pursues new growth prospects. Shares rose 1.7% in Wednesday’s pre-market trading session.

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Specifically, Las Vegas Sands (LVS) has inked agreements to sell properties including the Venetian Resort Las Vegas and the Sands Expo and Convention Center. Under the terms of the deal, funds managed by affiliates of Apollo Global Management, will buy subsidiaries that hold the operating assets and liabilities of the Las Vegas business for about $1.05 billion in cash and $1.2 billion in seller financing. VICI Properties Inc. will acquire subsidiaries that hold the real estate and real estate-related assets of the Venetian for about $4 billion in cash.

“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said Las Vegas Sands CEO Robert Goldstein. “This company is focused on growth, and we see meaningful opportunities on a variety of fronts. Asia remains the backbone of this company and our developments in Macao and Singapore are the center of our attention.”

“There are also potential development opportunities domestically, where we believe significant capital investment will provide a substantial benefit to those jurisdictions while also producing very strong returns for the company,” Goldstein added.

The closure of the transactions is still subject to customary closing conditions, including regulatory approvals. Goldman Sachs & Co. LLC acted as the exclusive financial advisor to Las Vegas Sands.

HSBC analyst Charlene Liu on Jan. 28 cut the stock’s price target to $53.50 from $55.20 and maintained a Hold rating following the company’s Q4 results.

Although Liu believes that there is a recovery underway, especially in Asia, there is still much uncertainty. Additionally, the analyst noted that a dividend resumption will depend on cash flows and a business recovery. (See LVS stock analysis on TipRanks).

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy consensus rating is based on 3 Buys and 3 Holds. The average analyst price target of $58.75 implies downside potential of almost 10% to current levels. That’s after shares jumped 21% over the past month.