.P. Morgan analyst Joseph Greff said an initial public offering is likely at the end of November or early December, and could allow Sands to raise us$ 1 billion to us$ 2 billion through the sale of a minority stake in its Macau operations. "We believe this moves (Sands) one step closer to a clearer path of much needed improving liquidity and balance sheet de-levering," Greff said in a research note.
The casino company had said last week that its lenders had agreed to amend its us$ 3.3 billion Macau credit facility, a move that provided relief from loan covenants and allowed Sands to sell a minority interest in its Macau assets. Las Vegas Sands operates two casinos in the Chinese gambling enclave of Macau, the Palazzo and Venetian resorts on the Las Vegas Strip and a casino in Pennsylvania.
The combination of a global recession and collapsing credit markets brought Sands perilously close to defaulting on its debt, but the agreement with Macau lenders clears the way for raising new capital. "Today's announcement surrounding the possible listing on the Hong Kong Stock Exchange further alleviates liquidity concerns," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.
He said options activity in the September and December call options pinpoint further gains in the stock over coming months, with the us$ 15 strike expiring next month attracting buying in 5,500 contracts at prices up to a premium of 70 cents per contract.
Wilkinson also said that more optimistic investors predict Las Vegas Sands shares will rise more that 30 percent from the current share price of us$ 13.29 before the end of the year, reflected by the 1,100 lots traded in the December us$ 17.50 call strike.
Investors have been betting on that Sands and Wynn Resorts Ltd will proceed with initial public offerings for stakes in their Macau assets, as analysts forecast that the Chinese gambling enclave will recover faster than Las Vegas. Wynn submitted an application to list its Macau unit on the Hong Kong exchange last month, hoping to raise as much as us$ 1 billion.
Shares of Las Vegas Sands were up 44 cents to us$ 13.19 in afternoon trading, while Wynn gained 42 cents, or 0.8 %, to us$ 55.27.