Tuesday, January 6, 2009

Wynn or Adelson want Frontier land?

[UPDATE: Howard Stutz, the only R-J reporter whose blog is worth a damn, has this up this morning about the Adelson-Elad thing. He's as dubious as the rest of us.]

Deutsche Bank gaming analyst Bill Lerner issued this analysis this morning in his regular emails:

Bloomberg has picked up an Israeli newspaper (‘The Marker') story which reports that Las Vegas Sands will swap shares for Elad's 35 acres on the Strip. This site is located directly across from Wynn's Encore. Wynn has previously indicated an interest in this land via a similarly described swap for shares, valued at a fraction of the $35m/acre that Elad paid. Perhaps LVS is being confused for WYNN by this Israeli paper. However, if LVS proceeds with this transaction, the company would be issuing more stock for future 'greenfield' development in an environment where it has been impossible to raise capital to complete their original development pipeline. Similar to its recent primary equity offering, this transaction as described would be further dilutive. Furthermore, LVS has contiguous land in what we call its 'toilet bowl' site, which is 18 acres behind its Venetian/Palazzo/Sands Expo center in Vegas, so in our view the Elad site makes strategically less sense.

Make of it what you will. I didn't find the Bloomberg story, but I did find this Reuters piece from two hours ago in which one of Elad's main partners denies any deal pending with Las Vegas Sands or Adelson. As Lerner says, it doesn't make a whole lot of sense. It also doesn't make any sense for Wynn, who has all that free land behind him on the golf course to develop, to go picking up the land across the street unless he really, really, really wants to control the view and the price was ridiculously cheap.

Gosh, there are an awful lot of moving parts on the Strip these days, aren't there?