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Las Vegas Sands sells the Venetian, Palazzo, Sands Expo for $6.25B

In the two-part deal, VICI Properties will buy the property and all assets associated with the Venetian and the interconnected Palazzo, along with the Sands Expo for $4 billion. Apollo Global Management will acquire the operations of the Venetian for $2.25 billion.

The global pandemic broadsided Las Vegas, shuttering the Strip where Las Vegas Sands is the biggest operator. Sales growth vanished last March as infections spread across the U.S. The company posted a quarterly loss of almost $300 million in January.

LAS VEGAS, USA – OCTOBER 16, 2018: The Venetian Resort Hotel Casino opened on May 3, 1999., Las Vegas USA

The sale comes just two months after the death of CEO and Chairman Sheldon Adelson, who transformed the landmark Las Vegas casino that was once a hangout of Frank Sinatra’s Rat Pack into a towering Italian-inspired complex.

Adelson, however, for years had pushed hard into Asia. Sands under Adelson expanded to Macao, the only place in China where casino gambling is legal, where he directed his company to build land where there wasn’t any, piling sand up to create the Cotai Peninsula. Soon revenue in Macao outstripped that from Las Vegas.

Sands said Wednesday that Asia is where the company’s focus will remain.

“This company is focused on growth, and we see meaningful opportunities on a variety of fronts,” said Chairman and CEO Robert Goldstein. “Asia remains the backbone of this company and our developments in Macao and Singapore are the center of our attention.”

Patrick Dumont, the company’s president and chief operating office, said “our long-held strategy of reinvesting in our Asian operations and returning capital to our shareholders will be enhanced through this transaction.”

VICI will enter a triple-net lease agreement with Apollo for the Venetian. The lease will have an initial total annual rent of $250 million and an initial term of 30 years, with two 10-year tenant renewal options.

The resort casinos have three luxury hotel towers with gaming, entertainment, shopping, and dining. All total, the Venetian and Palazzo have more than 7,000 all-suite rooms, 225,000 square feet of gaming space, and 2.3 million square feet of meeting space.

Apollo and VICI are the right companies to lead the properties into the future, especially with the addition of the MSG Sphere entertainment venue creating new growth, Goldstein said in a statement.

Travel-related companies, from airlines to hotels and resorts, are roaring back with the rollout of a slew of new vaccines.

“I am confident Las Vegas will soon return to a more normal operating environment and The Venetian’s hard-working and dedicated team members will continue delivering a world-class experience to guests eager to enjoy it. I know I will be rooting for them,” Goldstein said.

Apollo Partner Alex van Hoek said in a prepared statement that the deal “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 sale is expected to close by the fourth quarter.

“We will always look for ways to reinvest in our properties and those communities,” Goldstein said of Macao and Singapore. “There are also potential development opportunities domestically, where we believe the significant capital investment will provide a substantial benefit to those jurisdictions while also producing very strong returns for the company.”

Dumont added that the Sands’ enhanced financial strength from this deal will give them the opportunity to pursue many new development opportunities.

“Our company’s history will always be traced to the opening of The Venetian in Las Vegas,” Dumont said. “Today, Sands is the most valuable gaming company in the world with an established track record of success in developing and operating large-scale integrated resorts in Asia and the United States.”

From Las Vegas Sun
Published Wednesday, March 3, 2021

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