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Old 04-26-2009, 09:31 PM   Nav to Top  #1
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Default Las Vegas Sands Considers Selling Macau Casino

Las Vegas Sands Considers Selling Macau Casino - ReportLast update: 4/26/2009 8:17:29 PMHONG KONG (Dow Jones)--Las Vegas Sands Corp. (LVS) is exploring the sale of its Macau casino for a bargain basement price of about US$1.3 billion, the South China Morning Post reported Monday, citing unnamed sources. The newspaper said Las Vegas Sands has spoken with potential buyers about splitting up the Sands Macao into separate property and operating businesses. The company is considering a sale and leaseback deal in which it would sell the building, continue running the 229,000-square foot casino floor under its gaming license and pay its new landlord rent based partly on how the casino performs, the report said. The Sands Macao discussions began last week after the company's failed attempts to sell luxury shopping centers attached to its Venetian and Four Seasons resorts in Macau, the paper said. The report said the company said recently that several parties were interested in investing in its various Macau businesses, but a spokesman declined over the weekend to comment on a potential sale of the Sands Macao.

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Old 04-26-2009, 10:18 PM   Nav to Top  #2
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Default More Detail on LVS Macau

Here is the full article :

The Sands Macao, the first foreign-owned casino in the world's largest
gaming market, may soon go on the block for a bargain basement price
of about US$1.3 billion.


Heavily indebted owner Las Vegas Sands is exploring the sale of the
casino after recent attempts to offload luxury shopping centres
attached to its Venetian and Four Seasons resorts in Macau met with
scant interest, sources said.


Las Vegas Sands has spoken with potential buyers about splitting the
Sands Macao up into separate property and operating businesses.


The company is mulling a sale and leaseback in which it would sell the
building, continue running the 229,000 square foot casino floor under
its gaming licence and pay its new landlord rent based partly on how
the casino performs.


The Sands Macao discussions began last week after talks to sell the
shopping centres stalled because buyers found the US$1 billion price
too high.


"It was kind of, 'OK then, if you don't want the malls, do you want
the Sands?'" one source said, while confirming that the company's
Macau gaming licence was not up for sale.


Las Vegas Sands suspended work last year on a US$3.3 billion, 6,400-
room resort project on Macau's Cotai strip to conserve cash amid the
global recession and gambling slowdown.


The company had US$10.8 billion of long-term debt at the end of last
year.


It warned that it was in danger of busting financial covenants but
subsequently gained breathing space by selling US$2.1 billion in new
shares.


The company said recently that several parties were interested in
investing in its various Macau businesses, but a spokesman declined
over the weekend to comment on a potential sale of the Sands Macao.


"We will continue to evaluate all alternatives that provide us further
financial flexibility and we will provide any necessary updates at the
appropriate time," said Las Vegas Sands vice-president of
communications Ron Reese.


Goldman Sachs, Las Vegas Sands' longtime financial adviser, held
informal discussions about a sale and leaseback of the Sands Macao
with property developers and private equity firms, a number of sources
said. Goldman declined to comment.


"The Sands property is available," a banker said. "But it may not
sell. People will want the casino licence, which is a licence to print
money."


Because the process is at an early stage, Las Vegas Sands has not put
a price on the property or sent out an information memorandum to
interested parties.


Floris Van Dijkum, the chief investment officer at Macau property
investor Speymill Macau, calculated that a deal for the Sands Macao
could be worth US$1.3 billion, based on the property's cash flow over
the past 12 months and an interest coverage ratio of 2.


Such a scenario would appear to represent a bargain basement price,
reflecting a 7.5 per cent rental yield to potential buyers.


This may look high, considering that investors in United States
Treasury 10-year bonds are getting yields of only 2.9 per cent.
However, analysts said the yield should be expected to price in the
regulatory and competitive risks associated with owning a casino in
Macau.


CLSA gaming analyst Aaron Fischer was even more pessimistic, saying
the 7.5 per cent yield was too low. If, for example, investors
demanded a 10 per cent yield, the building's value would fall to US$1
billion.


The Sands opened in 2004 as Macau's first western-style casino
following the end of Stanley Ho Hung-sun's four-decade monopoly on
gaming in the enclave.


Las Vegas Sands famously made back its initial US$285 million
investment in the property in less than 12 months, but the Sands has
since been eclipsed by newer and glitzier properties, such as the Wynn
Macau and Las Vegas Sands' own 3,000-room Venetian resort on Cotai.


Last year, the Sands Macao recorded US$213 million of earnings before
interest, tax, depreciation and amortisation. This amount was sharply
below the US$372 million profit it made in 2007.


All Macau casinos face a drain in profit if Beijing continues
restricting mainland residents' visits to the gaming enclave.


Mr Van Dijkum, who is not a buyer, because his fund does not invest in
casinos, said the deal would be attractive to the right investor,
because Sands Macao was still earning good money.


"This could be a very interesting financial investment for someone
with significant spare change."


But a private equity investor with knowledge of the sale argued it was
too risky. "I don't see any private equity funds putting money into
Macau's gaming sector, particularly that much money, because they are
all just being incredibly cautious," the investor said.


Macau Fisherman's Wharf, a HK$2 billion theme park developed jointly
by Mr Ho and Macau legislator David Chow Kam-fai, just completed a
heavily discounted buyout of international hedge funds including Och
Ziff and TPG-Axon, who invested US$400 million in its debt securities
in 2006.


Buyout houses Apollo Management and TPG Capital bought Harrah's
Entertainment for US$27.8 billion in January last year. The US casino
giant has struggled with its debt covenants ever since.


Sources said Las Vegas Sands' Macau shopping centre auction generated
lacklustre interest because would-be buyers were asked to shoulder low
returns and bet big on bullish projections despite the global consumer
slowdown and uncertainties in Macau.
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Old 04-26-2009, 10:46 PM   Nav to Top  #3
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Wow - like I said Friday - anything can happen by Monday .
I wonder what effect this will have on LVS stock price tomorrow.
These are crazy times :)
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Old 04-26-2009, 10:58 PM   Nav to Top  #4
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WHAT! This is not what I wanted to see on this fine Sunday night :(. Apparently LVS is in much worse shape than we think. Anyone hear Ho on the phone making offers...
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Old 04-27-2009, 02:03 AM   Nav to Top  #5
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Default RE: Las Vegas Sands Considers Selling Macau Casino

This is a bit of bad news. It does seem LVS is worse off than we thought. And also they can't unload that mall that they were saying they had lots buyer for. Fortunately it is just a sale of the building, but I think we will see millions of short trades piling on today. I think I might sell out a good portion of my position today in pre-market or early trading, and pick some more up later.
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Old 04-27-2009, 02:20 AM   Nav to Top  #6
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Oh my! LVS will likely go down 30% on this today, but who knows, could get extremely bearish all week.

No panic. I say HOLD. Keep in mind that I am almost always wrong.
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Old 04-27-2009, 02:50 AM   Nav to Top  #7
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I'll preface by saying I'm long LVS, but I'm not a pumper.

I think that the problem, if you consider it a problem, is that LVS is in such a good news/bad news situation right now that trying to time the moves it might make on any given day/week is very difficult.

There are so many rumors/speculation right now regarding where the company is positioned that it's tough to keep track of what might happen next:

1. Will the malls sell or not? Rumor is that they didn't get the asking price they're looking for on the malls.

Good news: The didn't "fire sell" an asset for well below it's value.
Bad news: Malls haven't sold.

2. Earnings are to be released sometime within the next 2 weeks.

Good news: Macau gaming was up last quarter and may beat expectations.
Bad news: Vegas gaming and the casino sector as a whole were down.

3. Bethworks Casino in Pennsylvania to open in 3 weeks.

Good news: New cash flow.
Bad news: Might already be priced into the stock.

4. Sheldon Adelson meeting with Stanley Ho regarding Macau gaming issues.

Good news: "Quiet period" for Adelson ends on May 4, so we may get news on the topics of conversation in his meetings with Ho.
Bad news: We might not hear anything about his meetings with Ho, leaving people to wonder what is going on with the projects in Macau.

5. Discussions of selling Las Vegas Sands Macau (note, this is NOT the Venetian Macau).

Good news: Might entice a mall buyer and provide cash flow through the lease enabling them to pay off additional debt/restart other projects.
Bad news: Perhaps a sign of weakness in having to sell a facility that they weren't planning on selling.

6. Debt restructuring.

Good news: They now have the option to buy back up to $800 million in debt.
Bad news: They haven't show any indication that they actually plan on doing so.

I haven't included the insider stock purchases, simply because I can't really figure out how that could even be considered bad news.

Obviously, the big prize at the end of 4Q or early 1Q in 2010 is the opening of Marina Bay Sands in Singapore, which could be a game changer for LVS.

I don't think that the prospects of Marina Bay Sands opening is enough to push share price up, or even stabilize the price, right now, but at some point (assuming nothing disasterous happens), share price will go up on the anticipation of Marina Bay Sands opening.

Tough to bail on LVS when so much could happen with so little warning within the next 30 to 60 days.
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Old 04-27-2009, 03:07 AM   Nav to Top  #8
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Incredible!!! Just when I thought that LVS was continuing its trayectory to the moon, we get this news. I only have 500 shares so I may sell when the market opens, then later on rebuy. I might have a chance to buy more shares for a cheaper price.
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Old 04-27-2009, 03:49 AM   Nav to Top  #9
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I am long, I am with germs, its a great stock, just a sell and rebuy situation. Why not profit on the 20% down on Monday? If the market gets hit on monday, and this news, LVS could easily drop that much.
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Old 04-27-2009, 07:32 AM   Nav to Top  #10
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WOW 7% drop already premarket might even go lower when the market opens. bad news
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