Las Vegas Sands Considers Apple-Style Bond Sale to Fund Payout
Board members of the Las Vegas-based company are discussing borrowing rates to finance a possible buyback or dividend payment, Adelson, the company’s founder and chief executive officer, said yesterday on a conference call.
“We have a very positive attitude toward doing this,” Adelson said. “We’re not at the finish line, but we’re in our final stretch.”
A dividend or buyback would further Adelson’s stated goal of returning cash to investors. Apple sold $17 billion of bonds on April 30 in the biggest corporate bond sale ever. Las Vegas Sands finished the first quarter with $2.38 billion in unrestricted cash and total debt of $9.83 billion, according to a statement yesterday.
Sands, the largest U.S.-based casino company, said in March that it may have violated parts of the Foreign Corrupt Practices Act. Last week Pricewaterhouse Coopers LLP, its auditor since the company first sold stock to the public in 2004, resigned.
The casino operator paid $3.09 billion in dividends last year, including a $2.75-a-share special payment in December, according to its annual report. Adelson, 79, who owns about 52 percent of Sands stock, collected $1.62 billion.
Las Vegas Sands rose 0.7 percent to $56.65 in extended trading yesterday after the company reported first-quarter sales and profit that beat analysts’ forecasts as gambling growth in Macau picked up. The stock finished unchanged at $56.25 in regular trading in New York and has gained 22 percent this year.
Net income rose 15 percent to $572 million, or 69 cents a share, the Las Vegas-based company said in a statement. Profit of 71 cents beat the 67-cent average of 23 analysts’ estimates compiled by Bloomberg. Revenue increased 20 percent to $3.3 billion, exceeding the $3.27 billion average of estimates.
Gambling growth in Macau, where Las Vegas Sands owns four casinos, has accelerated this year. Revenue for the operators there rose 15 percent in the first quarter to 85.3 billion patacas ($10.6 billion), according to Bloomberg Industries research.
An internal audit found “likely violations of the books and records and internal provisions” of the Foreign Corrupt Practices Act, a federal law that bars payments to foreign officials for favors, the company said in a March filing.
The casino operator said last week there had been no reportable disagreements with Pricewaterhouse going back to 2011 and that it is seeking a replacement.
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