Will the Las Vegas Sands Take a Gamble?

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One of the Las Vegas Sands’ (NYSE:LVS) larger shareholders, Land & Buildings Investment Management, recommended the casino operator should break its business into three companies in order to boost its stock-market value.

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According to a report released Monday by Jonathan Litt, founder and chief executive of Land & Buildings, the company would be worth $85 per share if its retail and hotel properties were split off as two separate real estate investment trusts, or REITS. A REIT is a company focused on owning and operating income-producing properties, like office buildings and malls, and does not pay corporate tax as long as 90 percent of its taxable income is distributed to shareholders. Shares in the company closed at $44.35 on Monday.

This year to date, shares in the Las Vegas Sands, owner of the Venetian and the Palazzo on the Las Vegas Strip, have fallen 6.8 percent. Concerns over the slowdown in China and subdued gambling in Las Vegas has put strain on other casino operators as well; Wynn Resorts (NASDAQ:WYNN) has fallen 22 percent, MGM Resorts (NYSE:MGM) has declined by less than one percent, and Caesars Entertainment (NASDAQ:CZR) has fallen 24 percent since its initial public offering in February.

But Lazard Capital Markets analyst Jake Fuller wrote in a recent research note that the Las Vegas Sands is the best positioned firm within the segment to take advantage of the upward trend in Macau in the mass market. The Las Vegas Sands has plans to invest at least $2.5 billion to build its fifth resort in Macau.

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