“Hey, I know this is like a crazy idea. But would you ever buy the Venetian?”
That’s a call that David Sambur, Apollo Global Management’s co-head of private equity, recounted receiving while walking in Central Park this fall.
The answer, ultimately, was yes.
On Wednesday, Las Vegas Sands, the world’s largest casino company, announced that it would sell the Venetian, long seen as one of its prized assets, to Apollo and Vici Properties for $6.25 billion. Apollo will operate the property and Vici will own the real estate.
Executives from Sands, which was founded by the billionaire gambling magnate and Republican megadonor Sheldon Adelson, who died in January, called the deal “bittersweet,” but said they will use the proceeds to invest in the group’s casinos in Macau and Singapore, which form the “backbone” of the company.
“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said Robert Goldstein, the chief executive of Sands. “As we announce the sale of The Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history.”
For Apollo, the deal is a bet that leisure and business travel will return to pre-pandemic levels, or close enough to make the purchase pay off. It follows similar investments, like buying a stake in travel booking company Expedia early in the pandemic and extending a loan to Aeromexico in October after the Mexican airline filed for bankruptcy a few months before.
Other casino companies, like Caesars Entertainment, have been saying that leisure travel in Las Vegas is poised to recover quickly. Judging when business conventions will return is harder, Mr. Sambur said. Apollo’s research found that the conference business tends to track the stock market and corporate profits, both of which are strong right now.
“It’s a very audacious bet to make,” he said. “But all of the fundamentals are there if you look hard enough.”