Posted on: March 3, 2021, 06:42h.
Last updated on: March 3, 2021, 06:44h.
LVS Corp has agreed to sell its flagship Las Vegas Strip property, the Venetian Resort, plus the accompanying Sands Expo and Convention Center for $6 billion. The buyers are private equity giant Apollo Global Management, which announced the deal early Wednesday, and VICI properties, the independent REIT created by Caesars Entertainment.
Rumors have been swirling of a possible sale of the iconic resort since November. The property was the first to be built by LVS and the late Sheldon Adelson. Opened in 1999 at a cost of $1.9 billion, it set the tone for a new kind of opulent, sprawling integrated resort that would characterize LVS’s move into the casino markets of Macau and Singapore.
Today, east Asia is where LVS makes the lion’s share of its money. The sale of the Venetian suggests Adelson, prior to his death in January, was bearish about Las Vegas’ pandemic recovery prospects and was preparing a new future for the company without him.
Going… Going… Gondolier
In contrast, in a statement Wednesday, Apollo Partner Alex van Hoek said the investment “underscores our conviction in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and across the world.”
The Venetian is America’s premier integrated resort, with an unrivaled set of amenities to serve guests across hospitality, meeting events, gaming, and entertainment – categories that we believe are well positioned for strong recovery and long-term growth, he added.
“The team at Las Vegas Sands, under the leadership and vision of Sheldon Adelson, built an irreplaceable asset that is renowned for its quality, scale and integrated offerings, and we see significant opportunity to invest in and accelerate its growth.”
Betting on Bounce Back
Under the terms of the deal, Apollo Funds will acquire the operating company of The Venetian for $2.25 billion. VICI Properties will purchase the property’s land and real-estate assets for $4 billion, for a total transaction value of $6.25 billion. Once the deal is finalized, Apollo will enter into a long-term triple net-lease agreement for The Venetian with VICI.
Apollo’s belief in a strong rebound for the gaming industry was also evident in its $1.9 billion takeover bid for Great Canadian Gaming, which was accepted by shareholders at the beginning of the year.
Last year, Apollo took Italian sports betting operator Gamenet Group SpA private, and made a play for British bookmaker William Hill, eventually losing out to Caesars Entertainment. It has also agreed to invest €500 million ($588 million) in Czech lottery company Sazka Group as it looks to expand into North America.