Las Vegas Sands’ Stock Buyback Firms Cash-Return Pledge

Las Vegas Sands Corp. (LVS), the largest U.S.-based casino company, said it will repurchase $2 billion in stock, furthering founder Sheldon Adelson’s stated goal to return cash to shareholders.

Adelson, the Las Vegas-based company’s billionaire chairman and chief executive officer, announced the multiyear buyback at the company’s annual meeting today in New York, without giving details.

The move follows approval earlier today from Macau’s government for the company to sell Four Seasons co-ops at its unit that operates casinos in the Chinese territory. Sands was considering a special dividend or a stock buyback, people with knowledge of the situation said in April. Adelson confirmed in May that the company was weighing such a move.

Approval to sell the Four Seasons units, which have already been built, indicate an improving business environment for the company in the Chinese territory, Adelson said. Sands last year took a $100.7 million charge on parcels that it failed to get approval to build on.

“I think that finally getting the Four Seasons okay signals a re-examination, on the positive side, of our relationship with the Macau government,” Adelson said at the meeting, which was broadcast on the company’s website.

Photographer: Daniel J. Groshong/Bloomberg

Las Vegas Sands Corp. Founder Sheldon Adelson announced the multiyear buyback at the company’s annual meeting today in New York, without giving specifics. Close

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Photographer: Daniel J. Groshong/Bloomberg

Las Vegas Sands Corp. Founder Sheldon Adelson announced the multiyear buyback at the company’s annual meeting today in New York, without giving specifics.

Casino Licenses

Sands will also sell residential units at its St. Regis and Parisian hotels in Macau, which are under construction, Adelson said. The sale of co-ops and retail properties are part of a strategy to raise funds to pay for casino and convention center development.

The company is continuing to pursue casino licenses in Japan and Spain, he said. Continued negotiations with the Spanish government will depend on whether a smoking ban will be lifted and whether online gaming is allowed to continue in the country.

“There’s no benefit to our society to have internet gaming,” Adelson said. “If I look at the reaction to the land-based casino, it’s either flat or going down. We can’t live with that.”

Sands is not interested in pursuing a casino license in New York because the tax rates being discussed are too high and the locations in the northern part of the state being offered by Governor Andrew Cuomo are not populated enough to give the company adequate returns on its investment, Adelson said.

Investment Trust

The company will consider the idea of spinning off some of its properties into a real estate investment trust to boost its stock price, however, Adelson said he wasn’t convinced such a structure would work for him.

“If somebody else owned our real estate assets, our hotels, our exhibition and convention center then we’d be hampered somewhat in our ability to expand and to accommodate our customers’ needs,” he said.

Penn National Gaming Inc. (PENN), the operator of 29 casinos and racetracks, announced a plan in November to split into two public companies this year by placing most of its properties into a REIT to be owned by existing shareholders. Other casino companies will probably consider similar moves to free up capital, Joseph Greff, a JPMorgan Chase & Co. analyst, said at the time.

Sands fell 1.9 percent to $57.35 at the close in New York, after climbing as much as 2.3 percent after buyback plan was announced. The stock has risen 24 percent this year through today, compared with a gain of 13 percent for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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