UPDATE 1-Waddell & Reed exits Sands China, shifts stake to Las Vegas Sands

Tue May 27, 2014 10:25pm EDT

* Sands China shares sold at HK$55.45 each, 4.8 pct discount to Tuesday's close

* Waddell & Reed buys 16.96 mln Las Vegas Sands shares

* Las Vegas Sands stake gets international gaming exposure (Adds final price of selldown, Waddell purchase of Las Vegas Sands stake, context)

By Elzio Barreto and Farah Master

HONG KONG, May 28 (Reuters) - U.S. fund manager Waddell & Reed Financial Inc said Wednesday it raised $1.38 billion by selling its remaining stake in Macau-based Sands China Ltd, and shifted most of its holdings to parent Las Vegas Sands to boost its global gaming exposure.

The sell-down comes as Macau gaming stocks face pressure due to a raft of negative news, after clocking a scorching pace of growth over the past two years.

Among investors' concerns is a decision by authorities in the world's largest gambling market to urge banks to restrict the use of China's state-backed bank card to buy luxury goods in casinos.

The restrictions could make it harder for Macau's mass-market visitors to obtain cash to gamble, while tighter liquidity in Macau's junket market could put pressure on gaming revenues in the next few months, analysts have said.

Waddell & Reed sold 192.64 million Sands China shares at HK$55.45 each, equivalent to a discount of 4.8 percent to Tuesday's closing price, according to a term sheet of the deal seen by Reuters. The shares were marketed in a range of HK$55.27 to HK$55.90 each.

The stock - which has posted a five-fold increase since listing in Dec. 2009 - was down 2.7 percent in early Wednesday trade.

The firm said in a statement it bought 16.96 million shares of Sands China parent Las Vegas Sands Corp., without disclosing the price it paid for the shares. At Tuesday's closing price of $75.94 the Las Vegas Sands purchase would be valued at about $1.3 billion.

Waddell & Reed expects to benefit from better liquidity of Las Vegas Sands shares and has "a positive view on the investment outlook of Las Vegas Sands and its ability to generate revenue in China and elsewhere around the world," according to the statement, distributed by Business Wire.

Las Vegas Sands, the world's largest casino operator by market capitalisation, is made up of earnings from Sands' Las Vegas, Singapore and Macau operations, while Sands China is only the company's Macau business.

By shifting their holdings into the parent company, investors get exposure to global opportunities such as Japan where Sands is hoping to take advantage of the proposed liberalisation of casinos.

Sands has said it is also targeting other Asian countries such as South Korea and Vietnam for casino developments.

Bank of America Merrill Lynch was sole bookrunner of the Sands China selldown. (Reporting by Elzio Barreto and Farah Master; Editing by Stephen Coates)

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