Miriam Adelson’s $2 Billion Sale of Sands Stock Will Not Impact Macau Unit

Sports Betting Writer Rendition:

Dr. Miriam Adelson made headlines this week with a jaw-dropping $2 billion sale of Las Vegas Sands (NYSE: LVS) stock, which sparked a significant dip in the company’s value. However, analysts are assuring investors that this move will not negatively impact Sands China, a vital unit of the casino operator.

Donald Trump Ron DeSantis Dr. Miriam Adelson Sheldon
Florida Gov. Ron DeSantis dines with Dr. Miriam Adelson in April at the Museum of Tolerance in Israel. Dr. Adelson’s $2 billion sale of Sands stock will have no impact on the company’s Macau operations, says an analyst. (Image: Axios)

The stock tumbled after Sands priced its offering at $44 per share, well below the previous day’s closing price of $47.66. Despite being the largest shareholder, Dr. Adelson’s lack of involvement in the company’s day-to-day operations is noted by JPMorgan analyst DS Kim, who suggests the transaction will not disrupt Sands China’s business.

“This should NOT have any impact on Sands China’s operation as Dr Miriam Adelson was NOT involved in the business nor held any position,” wrote Kim in a note to clients. “This is NOT the same as LVS selling the stake or doing a placement. In fact, LVS is actually re-purchasing the portion of these stakes.”

Kim’s clarification is critical, as Sands plans to repurchase up to $250 million worth of the stock that Adelson is selling, and no new equity will be issued in the wake of the large transaction.

Macau Business Unaffected By Adelson Sale

The Sands empire includes properties in Singapore and five integrated resorts in the lucrative Macau market, where Sands China reigns supreme.

While Sands initially recognized and capitalized on the potential in Macau under Sheldon Adelson’s guidance, today, the Chinese enclave is the world’s premier casino hub by gross gaming revenue (GGR). Fortunately, investors need not fret, as Dr. Adelson’s sale isn’t a harbinger of Macau’s future.

“So, this is a transaction by the widow of the founder of the parent-co of Sands China, which has zero implication for Macau’s fundamentals, in our view,” added Kim.

The analyst believes Macau concessionaires are on track to recover 85% of pre-coronavirus earnings before interest, taxes, depreciation, and amortization (EBITDA) in the current quarter.

Adelson’s Foray into Basketball

Seeking new avenues for investment, Adelson is using the proceeds from the share sale to gain a majority interest in the Dallas Mavericks.

This development, combined with LVS President and COO Patrick Dumont’s involvement in the transaction (who also happens to be her son-in-law), has raised speculation about the operator launching a bid to introduce casino gaming to Texas. Recent efforts to expand gaming in the state were rejected earlier this year, pushing any debate on the matter to 2025.

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