The company, with operations in Las Vegas, Pennsylvania, Singapore and Macau, China, would be worth $85 a share if it spun out its shopping-mall and hotel properties as two real estate investment trusts, with the rest of the company remaining a pure casino owner, according to a report released today by Jonathan Litt, founder and chief executive officer of Greenwich, Connecticut-based investment firm LandandBuildings. Las Vegas Sands shares closed at $44.92 on Sept. 21.
“LVS is a growth company at a value price at half the multiple of REITs despite twice the growth,” Litt, former senior global real estate strategist at Citigroup Inc., wrote in the report. “LVS is a property company and when valued as such it can be a double to current pricing.”
The Las Vegas-based company said this month it plans to invest at least $2.5 billion to build its fifth resort in Macau, and will develop Europe’s largest casino complex in Madrid. Adelson said last week that his company is looking for other development opportunities internationally, including projects in Japan, Korea and Vietnam.
Ron Reese, a spokesman for Las Vegas Sands, didn’t respond to a telephone call and e-mail seeking comment.
LandandBuildings, also known as Land & Buildings Investment Management LLC, held 79,600 shares of Las Vegas Sands as of June 30, the firm said in a filing with the U.S. Securities and Exchange Commission.
Adelson, 79, owns 424 million shares, or almost 52 percent, of Las Vegas Sands, according to data compiled by Bloomberg.
The shares of Las Vegas Sands, owner of the Venetian and the Palazzo on the Las Vegas Strip, have fallen 6.8 percent over the past year. Wynn Resorts Ltd. has dropped 22 percent and MGM Resorts International has declined less than 1 percent. Caesars Entertainment Corp. has fallen 24 percent since its February IPO.
Should Las Vegas Sands be broken up, according to Litt’s plan, the new mall and lodging REITs wouldn’t have any debt “and would have exceptional external growth opportunities through development and acquisition in Asia and around the world.”
A REIT is a company that focuses on owning and operating income-producing properties such as office buildings and malls, and doesn’t pay corporate income taxes. A REIT must distribute at least 90 percent of its taxable income to shareholders to maintain is tax status, according to the National Association of Real Estate Investment Trusts, a Washington-based trade group.
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