LEISURE LETTER (05/28/2015)



  • May 28: MGM Annual General Meeting: Proxy "Fight"
  • June 4: CCL special press announcement in NYC


LVS - received notice of an unsolicited mini-tender offer by TRC Capital Corporation ("TRC Capital") to purchase up to 2,500,000 shares of LVS's common stock at a price of $47.63 per share in cash, without interest.  

Takeaway: Thanks for the offer but i'll just sell into the pool of 5 million shares of LVS traded daily at the higher market price.


Stations Casino - is looking to sell shares to the public four years after leaving bankruptcy, people with knowledge of the matter said. The company, which owns or manages 21 casinos, has asked investment banks for proposals for an IPO that would take place this year. Station Casinos could be valued at more than $3.5 billion, including $2.15 billion in debt, one of the people said.


Takeaway: We'd love to see it this well run company back in the public domain. Look for the Hedgeye pre-IPO report.


Galaxy - deputy chairman Francis Lui Yiu-tung expects the company's non-gaming revenue in Macau to see a double-digit growth as the industry faces its toughest times in a decade. "It's hard to predict how big a proportion the non-gaming sector will account for as it just started in the past two years. We'll find out in three years," Lui said. 


So far, the group has invested HK$43 billion in the two phases of Galaxy Macau and Broadway Macau, nearly half of the planned HK$100 billion investment for the SAR. Lui said the group has enough cash and no debt. It will factor in changing market situations in Phases 3 and 4. Phase 2 has 7,000 employees, Lui added.


Takeaway: Please see our note out this morning on the successful Phase 2 opening. 


CCL -Jim Heaney, a financial executive with more than 25 years in the cruise and hospitality industries, including 17 years with Disney Cruise Line, will take the CFO role at Carnival Cruise Line. Most recently Heaney spent three years as CFO for SeaWorld Entertainment. Earlier he was CFO and SVP finance and travel operations at Disney Cruise Line. Prior to that, Heaney held various financial posts at Royal Caribbean Cruises; Pueblo International, which operated a large Florida-based grocery store chain; and Gould, Inc., a manufacturer of super mini-computers used primarily for military application.


April McCarran airport traffic rose 4.4% YoY

Takeaway: 20th straight month of growth for McCarran traffic


Westin Sydney sold -Singapore's Far East Organization has teamed up with its Hong Kong-listed sister company Sino Land for a A$445.33 million (S$467.72 million) acquisition of The Westin Sydney and its adjoining Heritage Retail podium. The property is being sold by GIC Real Estate. The five-star hotel features 416 luxurious rooms. The Westin Sydney continues to be managed by Starwood Hotels & Resorts under the existing management agreement.



Hedgeye Macro Team remains negative on Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.

Takeaway:  European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.

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