Shareholders disappointed with Sands' Hong Kong IPO

Nov 24, 2009 2:24 AM
Industry Insider by Ray Poirier |

For shareholders in Las Vegas Sands Corp. (LVS) Monday, it was like Peggy Lee’s singing, "Is That All There Is?"

The lament related to the initial public offering of Sands China on the Hong Kong stock exchange that will generate some $2.5 billion for the company.

Despite it being the third largest IPO in Hong Kong this year and the seventh largest globally, the offering was termed "lukewarm" by one observer.

Analysts probably contributed a great deal to the reaction. A few weeks ago, Las Vegas Sands officials indicated that they were seeking between $1.5 billion and $2.5 billion with the offering.

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More recently, however, news stories pumped up the figure to $3.35 billion for the 1.87 billion shares being sold. At the time, it was suggested the share price of the offering would range between HK$10.38 (US$1.34) and UK$13.88 each. The final figure was HK$10.38, or the low end of the range.

The share price translates to an estimate of 13.5 times next year’s earnings.

In addition to the IPO funds, the company indicated five investment banks have pledged $1.3 billion to help the company re-start its development of a project on Macau’s Cotai Strip.

Trading in LVS shares found weakness even though the Dow index showed a triple-digit gain. At Monday’s closing, the shares were listed at $16.04 down $0.31 with 29.5 million shares traded.

Question? Comment? E-mail me at: Ray Poirier