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Miriam Adelson $2 billion sale of Las Vegas Sands stock won’t affect Sands China unit.

December 1, 2023 World Events & Announcements

The market plummeted earlier this week after Dr. Miriam Adelson disclosed a $2 billion sale of Las Vegas Sands shares. One analyst, however, believes that the acquisition will not negatively impact the company’s Sands China subsidiary.

Sands announced an offering price of $44 per share late on Tuesday, which was significantly less than the day’s closing price of $47.66. On Wednesday, the stock experienced a significant decrease in value, accompanied by a volume that surpassed the daily average. Adelson and her namesake trust are the largest investors in LVS, but she does not participate in the daily operations of the casino company, according to JPMorgan analyst DS Kim.

Sands China’s operations should not be affected by Dr. Adelson’s absence from the company, according to a client letter from Kim stating as much.

Kim’s differentiation holds significance as it demonstrates that the company’s declaration of a $2 billion share sale, coupled with Sands’ commitment to repurchase up to $250 million of Adelson’s shares, would have had a considerably more pronounced impact on the share price by virtue of the dilution effect of new shares on existing shareholders. No additional shares are issued as a result of the Adelson transaction.

Sands is one of the few non-technology companies in the United States whose sales and revenues are predominantly reliant on China. Macau’s future appears to be vividly illuminated, which is fortunate for investors, given Miriam Adelson’s stake sale.

Macau concessionaires, including Sands China, might recover 85 percent of their EBITDA from the period prior to the coronavirus outbreak in the current quarter, according to the analyst’s estimation.

As previously disclosed, Adelson intends to obtain a majority stake in the Dallas Mavericks with the proceeds from the share sale.

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