LVS is formally trying to sell Sands Bethlehem (according to WSJ)
Las Vegas Sands Corp. (LVS) is formally trying to sell Sands Bethlehem, its regional casino on the site of the iconic Bethlehem Steel plant in Pennsylvania .
The project has long been a notable outlier for the casino giant, which makes the vast majority of its revenue from big betters in Asia and nearly all the rest from jet-setters visiting Las Vegas .
Last quarter the company hired Goldman Sachs to begin marketing the Pennsylvania casino. The bank has sent out information to 40 prospective buyers, a person familiar with the matter said.
Recent earnings at the casino--around $109 million before interest, taxes, depreciation and amortization for the last 12 months before September--has prompted insiders to conclude the casino might fetch as much as $1 billion based on the valuation of other regional casinos, the person said.
With an interior that evokes the site's industrial heritage, the casino was developed under prior management who had left the company by the time it opened in 2009. Its costs ballooned--Sands has now spent around $800 million on construction. Revenues initially disappointed. Rumors of a possible attempt at a sale have long been rampant.
Sands Chief Executive Sheldon Adelson has said that he was soured on the concept behind the Bethlehem casino and that its costs were outsized compared to the opportunity. He has also made clear that the company was determined to make the casino work.
With the addition of table games, which Pennsylvania lawmakers opted to allow in 2010, and other improvements, the casino's earnings have improved significantly, paving the way for a possible sale.
The news that the casino is officially for sale was first reported Thursday by Bloomberg .
While Bethlehem is closest casino to NY City, the governor has issued licenses authorizing building of three casinos in New York State. Apparently it is feared that this will drain much of LVS' business away.
Hey, I had forgotten about this until my hubby brought it up, but this makes sense: "Last quarter the company hired Goldman Sachs to begin marketing the Pennsylvania casino. The bank has sent out information to 40 prospective buyers, a person familiar with the matter said." They did have meetings with GS, and we never heard anything more about it at the time.