LV Sands'
$2.76 Billion Stock Offer
Las Vegas Sands Corp. on Tuesday
announced the seventh and eighth hotels for
the casino operator's Chinese Cotai Strip development,
but the latest joint venture agreement was overshadowed
by the company's secondary stock offering that
could land Chairman Sheldon Adelson and his
family more than $2.76 billion.
Before
the stock market opened Tuesday, Las Vegas Sands
announced it had set a $50.25 per share price
for the 55 million shares of common stock being
sold by several trusts that would benefit Adelson
and the Adelson family.
The
fixed price sent shares of the Las Vegas casino
operator and developer down to reflect the announcement.
By the end of the day, shares in Las Vegas Sands
closed at $49.97 in trading on the New York
Stock Exchange, down $1.28 or 2.50 percent.
Almost
19.6 million shares were traded, making Las
Vegas Sands the seventh most active stock on
the exchange.
Jeffrey
Logsdon, a gaming analyst with Harris Nesbitt,
maintained his neutral rating for Las Vegas
Sands, saying the offering should "remove
a meaningful overhang on the stock once the
shares are absorbed by the market."
Logsdon
added that "this should clear the way for
more normalized fundamental related trading
in coming weeks."
Prudential
Securities gaming analyst Bill Lerner had previously
thought the offering could impact the company's
shares because of the amount being sold back
into the open market.
"We
believe this may weigh on the stock as the market
is concerned about the magnitude of the secondary,"
Lerner said.
Upon
the sale, Adelson and trusts that benefit his
family still control 70.5 percent of Las Vegas
Sands, which operates The Venetian.
Matthew
Toole, a research manager with Thomson Financial
in New York, said the transaction was the largest
common stock offering ever in the gaming sector.
The original initial public offering by Las
Vegas Sands in December 2004 ranked second at
$794 million.
Toole
said it was the fifth largest all-time secondary
share public stock offering across all sectors.
"It
does seem to be the largest offering by an individual
or family," Toole said.
Las
Vegas Sands won't benefit from the stock sale
and a company spokesman said Adelson and his
wife planned to use the money to "continue
their pursuit of philanthropic causes."
Adelson
and Las Vegas Sands executives were in New York
and scheduled to ring the opening bell for the
New York Stock Exchange today.
Separately,
Las Vegas Sands and Hilton Hotels Corp. announced
an agreement to build a 1,200-room Hilton Hotel
and a 300-room Conrad Hotel on the Cotai Strip,
which is adjacent to the Chinese gaming enclave
of Macau. The agreement is nonbinding the companies
expect to sign a binding agreement by the end
of the second quarter.
The
hotels would be operated by Hilton while Las
Vegas Sands will own and operate retail, entertainment,
and casino facilities within the hotel sites.
Las
Vegas Sands, which operates the Sands Macau
and is spending $2 billion to open the Venetian
Macau in 2007 on Cotai, has similar agreements
with other hotel companies for the area of reclaimed
land between the islands of Taipa and Coloane.
Four
Seasons is building a hotel on the Cotai Strip;
Starwood is building both Sheraton and St. Regis
brand hotels; and Shangri-La is building both
a Shangri-La hotel and a Traders hotel.
"The
desire to be a part of the Cotai Strip by some
of the most prestigious brands in the hotel
business has been gratifying as they realize
the significance of this important development
and do not want to miss out on this opportunity,"
Adelson said in a statement.
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