Macau casino operator Sands China Ltd says its parent company, U.S.-based Las Vegas Sands Corp (LVS), intends to increase its shareholding in the company by about 1.19 percent. Las Vegas Sands currently owns approximately 70 percent of the issued share capital of Hong Kong-listed Sands China.
According to a Tuesday filing, Venetian Venture Development Intermediate II – the immediate controlling shareholder of Sands China and an indirect wholly-owned subsidiary of Las Vegas Sands – agreed on a share purchase transaction with a financial institution on Tuesday (December 5).
Under the deal, Venetian Venture will pay up to HKD1.95 billion (circa US$250.0 million) to purchase shares of Sands China.
Based on the closing price of HKD20.20 per share on Tuesday, the amount is equal to about 96,600,247 shares, “representing approximately 1.19 percent of the total issued shares” of Sands China, stated the filing.
In a memo issued after Sands China’s announcement, JP Morgan Securities (Asia Pacific) Ltd said the company’s filing suggested that Las Vegas Sands “plans to acquire Sands [China] shares from the market”.
“We view the event as meaningfully positive for Sands China (and marginally positive for its peers in general), as the news signals strong confidence/commitment from management, which is something that is needed to stabilise (frustratingly) bearish investment sentiment of late,” wrote analyst DS Kim.
The brokerage also noted that the scale of investment was “not negligible” versus the company’s float, “as the planned amount of circa US$250 million is equivalent to 6.5 days’ worth of Sands China trading value”.
Las Vegas Sands announced a US$2-billion stock repurchase programme during its third quarter earnings call in mid-October. Patrick Dumont, the group’s president and chief operating officer, said at the time that the company would favour stock repurchases rather than dividends as a way of returning value to shareholders.
In late November, Las Vegas Sands said it intended to repurchase up to US$250 million of its shares to be sold by the group’s largest stockholder, Miriam Adelson.
