Posted by: Frederik Balfour on July 8, 2009
Sheldon Adelson’s Las Vegas Sands (LVS) could raise $2 billion to finance its Macao operations through a Hong Kong IPO soon, said Michael Leven, company president and CEO. He told Bloomberg today in an interview in Singapore that the company will decide this month whether to list its shares.
A listing could provide a serious revival of fortunes for Adelson’s plans in Asia. Last fall he halted construction of new casinos in Macao, and he has been trying, unsuccessfully, to sell his retail properties adjacent to the Venetian Macau and Four Seasons Hotel. An IPO in Hong Kong spinning off Macao assets would ensure the parent company has enough cash to complete its $5.5 billion Marina Bay Sands casino project due to open in Singapore next year.
Raising the money in Hong Kong seems like a good bet. The local IPO market is roaring, and Hong Kong investors would love for a way to benefit from Macao’s growth. “I definitely think there is an appetite,” says Aaron Fischer, gaming analyst with regional brokerage CLSA. “Macao may not be looking so hot because of swine flu, but if you take a view longer than six months, fundamentals are improving.” Despite a decline in visitors and gaming revenues this year, Macao still tops the Las Vegas strip in terms of gaming revenues, and its long run prospects are excellent.
Fischer figures that in the best of all worlds, Adelson would be able to find a strategic investor from either Hong Kong or China who would be an asset in dealing with Beijing and Macao regulators. Local understanding is certainly something casino tycoon Stanley Ho, as well as his son Lawrence Ho, whose City of Dreams casino (MPEL) opened in June,
and daughter Pansy, who has a joint venture with MGM Mirage,(MGM) have going for them.