The Las Vegas Sands has its eye on Crown Resorts, Okada Manila and Wynn Resorts. Why? These casinos are bleeding money.
The pandemic has hit them hard. But the Sands may come to their rescue per John DeCree of Union Gaming.
In fact, the Sand’s founder and owner, Sheldon Adelson, is indeed interested in mergers. He is intent on keeping online gaming and sports gambling alive in the U.S.
“I’m not going to give up on developing Integrated Resorts. I’m going to add to our strategic thinking and strategic priorities…I’m now taking on the strategy of both acquiring and building and developing.”
Sounds like a plan. The three acquisition targets are desirable due to their proximity “to the Asian consumer, and particularly the Chinese consumer.”
Reviewing the status of the casinos in question reveals their vulnerability. To start, Crown is currently in bad shape with Australian regulators.
Then there is the Wynn subsidiary in Asia, the Wynn Macau. Last quarter saw significant losses in the area of $154 million. DeCree says that the timing now makes strategic sense.
“It would add US$1.6 billion of in place EBITDA immediately, plus cost synergies. It would give LVS 2,700 additional rooms in Macau and a significant increase in exposure to the higher-end premium mass and VIP segments.”
Finally, Okada Manila is a desirable target because of the growing local market. According to the Union Gaming analyst, while the Philippines gaming market doesn’t rival Las Vegas or Macau in regulatory maturity and transparency, the region possesses many of the same supply-driven attributes that made Macau an attractive investment opportunity 15 years ago.
“As such, we think the high-quality gaming assets in Manila could be given some serious consideration … Okada Manila tops our list of potential M&A targets in Manila.”
Of note, the final hotel tower of phase I at Okada Manila is about to be completed such that the property is ready to reach its potential on the other side of the pandemic.