LV Sands' $2.76 Billion Stock Offer - Thursday 16th of March 2006

by Howard Sttuz

Las Vegas Gaming Wire

LAS VEGAS 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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