New York (AP) — Shares of casino operators traded mostly higher Wednesday as shares of Las Vegas Sands Corp. rallied behind the debut of the Venetian Macao Hotel Resort and a Dubai World unit started a tender offer for shares of MGM Mirage.
A day after the opening of the USD 2.4 billion Venetian Macao, Goldman Sachs analyst Steven Kent was still cheering the megaresort’s operations.
In a second assessment of the property, Kent said in a client note that the Venetian Macao has a large number of enthusiastic employees and a diverse customer base.
He was also impressed with the ease of transportation, noting that buses, cars and taxis appear to be traveling to and from the property smoothly.
Shares of Las Vegas Sands added USD 1.65 to USD 99.26 in afternoon trading. The stock has traded between USD 63.68 and USD 110 over the past 52 weeks.
Infinity World Investments LLC, a division of Dubai World, started a cash tender offer on Monday to buy up to 14.2 million shares of MGM‘s outstanding stock. MGM shareholders will receive USD 84 per share in cash for each share tendered once the offer closes.
Dennis Forst of KeyBanc Capital Markets is pleased with the Dubai investment as it allows MGM to reduce its risks in Las Vegas, gives access to more potential customers and establishes a relationship with a wealthy investor that could lead to more transactions.
„We will need to flesh out the deal, but it is clear that leverage and risk is lowered, the major cash infusion should allow more flexibility going forward, and the company’s list of partners gets better and better,“ he wrote in a client note.
Forst reaffirmed his „Buy“ rating and increased his price target by USD 3 to USD 90.
Shares of MGM Mirage gained 99 cents to USD 83.36.
Elsewhere in the sector, shares of Wynn Resorts Ltd. managed to rise despite a downgrade from a Bear Stearns analyst. Joseph Greff lowered his rating on the casino operator to „Peer Perform“ from „Outperform,“ saying the stock has climbed enough on solid fundamentals and momentum.
Wynn Resorts‘ stock added 47 cents to USD 118.27. Among other casino operators, Harrah’s Entertainment Inc. gained 25 cents to USD 85.25, while Isle of Capri Casinos Inc. added 11 cents to USD 18.35.