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Las Vegas Sands (LVS) Sells Off Sands Bethlehem to Wind Creek

Zacks Equity Research

Las Vegas Sands Corp. LVS completed the planned sellout of Sands Bethlehem, PA, to Wind Creek Hospitality, an affiliate of the Poarch Band of Creek Indians of Alabama. The latter purchased Sands Bethlehem for $1.3 billion.

Notably, on Mar 8, 2018, Las Vegas Sands announced plans for selling Sands Bethlehem. In fact, the agreement with Wind Creek Hospitality was made after MGM Resorts MGM dropped its plan to acquire the casino. Also, Pennsylvania Gaming Control Board approved the sale of Bethlehem.

The move underscores Las Vegas Sands’ long-term strategy of focusing singularly on large-scale resort development. The company is also focusing on building integrated resorts for the growing tourist population.

Rationale Behind the Move

The sellout of Sands Bethlehem will help Las Vegas Sands to focus on its strategies of expansion and integrated resort building. The freed-up cash will also help Las Vegas Sands to deploy in non-gaming businesses and more lucrative international destinations.

Particularly, the company is concentrating on renovation and promotion of its Las Vegas properties to drive segmental performance. In fact, the Las Vegas Strip has been recording high occupancy rates over the past year. The improvement in employment rate and rise in tourism numbers in the region have been increasing demand at the company’s properties in Las Vegas.

Further, the diversification of its resort portfolio and non-gaming options would contribute highly to revenues. In fact, Las Vegas Sands, in collaboration with The Madison Square Garden MSG, Live Nation Entertainment LYV and Oak View Group, plans to create a large-scale music and entertainment venue in Las Vegas for concerts and events.

We also believe that the sellout of Sands Bethlehem will improve Las Vegas Sands’ operating results. In the first quarter of 2019, the company’s total EBITDA declined due to a decline in adjusted EBITDA from Sands Bethlehem businesses.

Share Price Performance

Over the past year, Las Vegas Sands’ shares have lost 31.1% compared with the industry’s 31.9% decline. However, the company’s solid business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations position it for long-term growth.


 

Las Vegas Sands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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