US casino giant Las Vegas Sands Corp is planning to increase its stake in Macau subsidiary Sands China Ltd, according to details released overnight.
Sands China said via a Hong Kong Stock Exchange filing that it had been informed by LVS that the company’s controlling shareholder will enter into a share purchase transaction with an unnamed financial institution to purchase up to HK$1.95 billion (US$250 million) in shares of the company – equivalent to 96,600,247 shares or 1.19% of total issued shares.
LVS currently holds a 70% stake in Sands China.
The transaction will be conducted by Sands China’s immediate controlling shareholder Venetian Venture Development Intermediate II, which is an indirect wholly-owned subsidiary of LVS.
In a research note issued shortly after Sands China’s announcement, investment bank JP Morgan said the transaction was “meaningfully positive” for the Macau-based operator because it “signals strong confidence/commitment from management, which is something that is needed to stabilize (frustratingly) bearish investment sentiment of late.”
JP Morgan also noted that the scale of the investment is not negligible versus its float, as the planned US$250 million investment is equivalent to 6.5-days’ worth of Sands China trading value.
LVS had flagged increasing its stake in Sands China after selling off its Las Vegas assets for US$6.25 billion in early 2022 but has remained prudent in deploying its riches in the months since. It may, however, have considered no time better than the present given that Macau gaming stocks are trading lower now than even before Macau reopened its borders on 8 January – despite Sands China reporting strong revenue and profitability in recent quarters.
LVS also revealed last week that it would buy back US$250 million worth of its own shares from its majority shareholder, Dr Miriam Adelson.
