|By Howard Stutz, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
March 10, 2009 - Months of mostly behind-the-scenes feuding at Las Vegas Sands erupted into the open Monday with the gaming company announcing that President and Chief Operating Officer Bill Weidner was no longer with the company he has led for almost 14 years.
Weidner, 63, had been feuding with Las Vegas Sands Chairman and CEO Sheldon Adelson over the company's falling fortunes since the fall. The casino operator said as much in a filing with the Securities and Exchange Commission in November when Las Vegas Sands completed a $2.1 billion recapitalization and kept itself out of bankruptcy.
At an investment forum a few days after the filing, Weidner characterized the bickering "as a junkyard-dog fight. There are several of us who have very strong opinions."
The company's board of directors set up a special committee to mediate the disputes between Weidner, his management team, and Adelson, the 75-year-old billionaire, founder and majority shareholder of Las Vegas Sands.
"Apparently that didn't work out so well," Susquehanna gaming analyst Robert LaFleur told Reuters Monday.
The company announced Weidner's departure in a statement that was absent quotes. Weidner also resigned from the company's board of directors. Las Vegas Sands spokesman Ron Reese said the casino operator would elaborate on the move in a pending filing with the Securities and Exchange.
In a Monday phone interview with Review-Journal columnist John L. Smith, Weidner said he decided to resign Sunday after the bickering increased.
"With falling stock prices and worsening global economic conditions, disagreements and conflicts arose between me and ... Adelson," Weidner told Smith. "As chairman, CEO and majority owner, Mr. Adelson has more recently insisted on more control of the company. It was time for me to move on."
The resignation takes effect April 1. Weidner will be replaced by veteran hospitality executive Michael Leven, 71, a member of the Las Vegas Sands board.
Leven, who resigned Monday as CEO of the Georgia Aquarium in Atlanta, is the founder and former president and chief executive of US Franchise Systems Inc., which developed and franchised the Microtel Inns & Suites and Hawthorn Suites hotel brands. He also has held posts at Holiday Inn Worldwide, Days Inn of America and Americana Hotels.
For the most part, Wall Street went silent on Weidner's resignation Monday. Several analysts said they wanted to hear what Adelson had to say today when he is expected to address an investment conference in New York that is sponsored by Deutsche Bank.
JP Morgan analyst Joe Greff speculated that Weidner's departure might mean other executives will leave, notably, President of Global Operations and Construction Brad Stone. Stone has a long association with Weidner stemming back to their days working in the Atlantic City casino industry in the 1980s.
Stone is heading the company's construction efforts in Singapore, where it expects to open the $5 billion Marina Bay Sands by the end of the year.
"We don't know, nor would we speculate about Stone's employment status," Greff said in a research note. "We do believe investors are appropriately concerned about Stone's continued employment given his significant contribution to the Las Vegas Sands efforts in Macau and, more recently, in the construction of the Marina Bay Sands ... a key driver of the longer term growth story for the company."
Weidner was viewed as the closest company confidant to Adelson, the go-to person on a variety of company issues. He was often in lock step with Adelson's political views, including advocating for an elimination of the Las Vegas Convention and Visitors Authority and the support of conservative Republican political candidates.
He joined Las Vegas Sands in December 1995, after serving as president of Pratt's Hollywood Casino Corp., where he operated the company's casino in Atlantic City and opened a riverboat casino in Chicago. Weidner had previously headed hotel operations for Caesars Atlantic City.
At Las Vegas Sands, Weidner was instrumental in the company's growth, including its initial public offering in December 2004. The management team -- Adelson, Weidner, Stone and Senior Vice President Rob Goldstein -- had been together for more than a decade.
Las Vegas Sands operates two Strip resorts -- The Venetian and Palazzo -- encompassing 7,000 hotel rooms and a 1.2 million-square-foot convention center. The company's expanding gaming empire in Asia includes two hotel-casinos in Macau and the Singapore project. The company is also opening a $700 million casino in Bethlehem, Pa., in May.
In the past 17 months the global economy has taken its toll on Las Vegas Sands. Shares have gone from an all-time high of $148.76 on Oct. 29, 2007, on the New York Stock Exchange to Monday's closing price of $1.42, an all-time low. Shares fell 35 cents or 19.8 percent.
"The news, while not a total surprise, has been received negatively by investors, as evidenced by the sell off today," Greff said.
Las Vegas Sands' market capitalization has fallen from $28 billion in 2007 to $927 million Monday. Last month, the company said it had a net loss of $111.3 million in the fourth quarter.
As part of the recapitalization in November, the company halted construction of a $600 million high-rise condominium tower on the Strip, stopped construction of four hotel-casinos on the Cotai Strip of Macau and scaled back its Pennsylvania casino project.
During the November investment forum, Weidner was asked why Las Vegas Sands didn't react more quickly and raise the needed capital sooner.
"We had to do what we had to do to put ourselves in a position to survive," Weidner said. "It was a matter of robust debate within the organization. It was pretty much a monumental screw-up."
Adelson and his family put about $1 billion in cash into the company to shore up its balance sheet. However, the recapitalization effort reduced Adelson's controlling stake to just above 51 percent.
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