U.S. 3rd richest man in 2008... Down $30bil

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U.S. Richest Men (3/2008) Net Worth

1-Warren Buffett $62bil
2-William Gates III $58bil
3-Sheldon Adelson $26bil

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Sheldon Adelson -- who has seen the value of his stake in Las Vegas Sands Corp. shrink by roughly $30 billion in the past year -- has agreed to a financing deal that further dilutes his holdings at a time when he faces an internal challenge to his authority.


Sheldon Adelson
On Tuesday, the company released the details of a planned $2.1 billion stock offering that would reduce the chairman's stake in Sands to 51.3% from 68.9%. Mr. Adelson will spend $525 million of his own money as part of the stock-purchase plan -- a safety net to help guard his majority control and sell the idea to other investors.

The move, which comes just several weeks after Mr. Adelson poured $475 million of his own cash into the casino empire, is an attempt to avoid defaulting on bank covenants that require Sands to maintain certain levels of cash flow and ensure the company has enough cash to fund operations.

Mr. Adelson's travails are part of a broader shakeout sweeping Las Vegas as the economic downturn and the credit crunch have combined to put pressure on major rivals. Many gambling companies had already embarked on ambitious building projects just as the economy began to turn sour.

Fellow casino tycoon Kirk Kerkorian, who owns a controlling stake in MGM Mirage, has also lost billions of dollars as MGM Mirage has seen its stock price plummet. Steve Wynn, the chief executive of Wynn Resorts, has also seen his company's share price sink as he prepares to open a new luxury hotel in the midst of a consumer drought. Other gambling companies, like Harrah's Entertainment and Station Casinos, are struggling under massive amounts of debt used to fund private buyouts of those companies.

The Sands board also took steps that could check Mr. Adelson's authority amid his aggressive expansion plans. In a filing with the Securities and Exchange Commission late Monday, the company said it had set up a new executive committee to mediate "outstanding differences between our Chief Executive Officer and other Senior Management Members and in response to a loss of confidence by certain Senior Management Members" regarding how the company is managed and governed.

Mr. Adelson, through a spokesman, declined to comment on the recent developments. The spokesman said that Mr. Adelson and his senior managers "recommended these additional corporate policies and procedures to the company's board of directors. They were approved and senior management and the board are committed to them. In these times it's only prudent to have the board work in closer consultation with senior management."

The events mark a rapid turnaround for Mr. Adelson, 75 years old, who in March was listed as the world's 12th richest man by Forbes magazine. A little more than a year ago, he presided over the opening of the world's biggest casino in the Chinese gambling enclave of Macau; at the same time he expanded the company's major Las Vegas properties.

CHIPS DOWN: Sheldon Adelson, at the opening of his Venetian Macao Resort Hotel last year, has seen the value of his casino empire tumble. He may now face management restrictions on his expansion plans.
Since then, the value of Mr. Adelson's stake in the company has fallen to around $1.3 billion from roughly $36.4 billion last October.

Even as the economy faltered and investors and analysts grew increasingly nervous about Sands' mounting debt and diminishing cash flow, Mr. Adelson insisted on pressing forward with development plans, say people with knowledge of the situation. Privately, however, his top three lieutenants -- President William Weidner, Executive Vice President Bradley Stone and Senior Vice President Robert Goldstein -- raised concerns with Mr. Adelson over the cost and pace of development as the economy continued to sour.

During an earnings conference earlier this year, Mr. Adelson tried to reassure investors that the company could rely on his personal fortune, if need be. He joked that a friend once told him he was the tallest man around "when you stand on your wallet."

Last month, when Mr. Adelson sank $475 million into the company to keep it from breaking banking covenants, he remained upbeat, emphasizing that the contribution was a sign of his belief in the company's future.

Sands' problems, however, only deepened, prompting Mr. Adelson's lieutenants to become more assertive -- mainly in addressing the company's development plans in light of its cash-flow issues.

In the past, Mr. Weidner, Mr. Stone and Mr. Goldstein, all longtime casino-industry insiders, had largely remained in the background, quietly executing Mr. Adelson's plans and often stepping aside to allow the founder to assume the role of public face of the company. The Sands' portfolio currently includes four properties in Las Vegas and Macau, plus two more under construction in Singapore and Bethlehem, Pa.

A person familiar with the situation said, "This is a very dynamic group of personalities. They've been together for 13 years and have worked through difficult times in the past, and I wouldn't bet against them to do it now either."

Visitors to Las Vegas have been declining for months as airlines have cut the number of flights and fuel costs kept drivers from visiting as well. Those who did visit cut their spending dramatically. That forced casino operators -- who now derive most of their profits from luxury hotel rooms, gourmet meals, shows and spas -- to slash prices on their hotel rooms in the hopes that cheap rooms would lure customers.

Meanwhile, the Chinese government recently curbed visits to Macau by restricting visas, dashing hopes that growth in Asia would offset troubles in the U.S.

Mr. Adelson and his executives now must overcome any internal disagreements and steer the company through a difficult course. That includes dealing with partially finished construction projects that the company now plans to suspend. It must later figure out when and if to resume them.