Sands Plans to Open Macau by 2011 (NYSE: LVS)

The word on the Street is that Las Vegas Sands Corp. (NYSE:LVS), which hopes to raise about $5.15B, will open most of its stalled Macau monstrosity by the end of 2011.  Then, LVS China will result in the company almost tripling its hotel rooms in the world’s biggest gambling hub.

Chia-Peck Wong reports at Bloomberg the project, an extension to the Venetian Macao, the world’s biggest casino, is a “quantum leap for Macau” as Las Vegas Sands Corp. bets that more convention space, hotel beds and shopping malls will entice visitors to prolong their stay in Macau, Michael Leven, chief operating officer of Sands China’s parent, told reporters yesterday.

Chairman Sheldon Adelson is seeking to raise as much as HK$26 billion ($3.4 billion) in what could be Hong Kong’s second-biggest initial public offering this year. The offer, together with a separate $1.75 billion in bank financing, would help the Macau subsidiary restart the 13.3 million square foot resort that has been halted since November last year after credit markets seized up and revenue dwindled.

However, the outlook is not all roses for LVS Macau as there seems to be some lingering doubt regarding the supply-demand for the offering.

“I don’t think demand for Sands’ shares will be strong given how Wynn’s shares have performed since their debut,” said Francis Lun, a general manager at Fulbright Securities Ltd. in Hong Kong. “The money from the share sale will be enough to restart the Macau project but they still need more because the project is huge.”

But, as Adelson sharply points out, “We believe that this is a very supply-driven industry. Supply begets demand, it’s happened here in Las Vegas.” Adelson made the comment in his videoconference from Las Vegas.

Assuming Sheldon Adelson completes the LVS Macau, they will be on pace to challenge SJM Holdings Ltd., Macau’s biggest casino operator by market share.

Sands joins Wynn Macau Ltd. in selling shares in Hong Kong after locally traded casino operators surged this year. Sands China’s offering values the company at 16.6 times next year’s estimated earnings before interest, tax, depreciation and amortization, according to three people familiar with the matter.

More of the story from Wong