Blackstone Announces Sale of The Cosmopolitan of Las Vegas
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Blackstone Inc. has reached an agreement to sell the Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65 billion, the company said on Monday, and told investors in a private letter that the sale is the company’s most profitable of a single asset ever. Blackstone acquired the two-tower property for about $1.8 billion seven years ago and spent an additional $500 million on upgrades, including renovating the nearly 3,000 guest rooms, building luxury suites and adding new restaurants and bars. Total profits after the sale would be about $4.1 billion, including cash flow from the property’s operations, according to a Blackstone letter to fund investors. The company made back nearly 10 times the amount of equity it invested in the Cosmopolitan, the letter said. The deal separates ownership of the property from the hotel and casino operations, which are being sold to MGM Resorts International for $1.625 billion, MGM said. A partnership that includes a Blackstone real-estate investment trust is acquiring the property for about $4 billion, according to the Blackstone investor letter.
The Swiss stock market lagged behind other European stock exchanges on Monday. The SMI lost 1.1 per cent to 11,691 points after slipping another 20 points in the last minutes of trading. Among the 20 SMI stocks, there were 14 price losers and 6 price winners. 33.26 (Friday: 26.04) million shares were traded. While stocks from the banking and insurance sectors were on the winning side, almost all other shares in the SMI recorded losses. The SMI daily winner was Credit Suisse (+2.5%). The share additionally benefited from the fact that the bank could unexpectedly receive $300 million in the dispute over the multi-billion damage from the collapse of funds of the financial services provider Greensill Capital. UBS shares rose by 1.2 per cent. In France, the verdict in the appeal against UBS for tax fraud was postponed because one of the judges fell ill. UBS had been sentenced to a record fine of 3.7 billion euros in the first instance. Holcim (+1.5%) was also on the winning side. The building materials supplier had announced the completion of the takeover of the US company Utelite Corporation and also an agreement to buy Poland's Polcalc. In both cases there was no information on the purchase price. The biggest losers in the SMI were Sika (-4.7%), followed by Geberit (-3.6%) and Givaudan (-3.1%).
European equity markets closed mixed on Monday as investors continue to weigh inflationary risks amid a sharp rise in energy prices. The Stoxx Europe 600 index fell 0.2% to 462.4 points. In Paris, the CAC 40 and SBF 120 gained 0.2% each. In Frankfurt, the DAX 40 gained 0.3%, and the FTSE 100 in London gained 0.2%. In Germany, parliamentary elections on Sunday resulted in a narrow victory for the Social Democratic Party (SPD) over the conservative CDU/CSU. However, with no party winning more than 26% of the vote, the leaderships of the various German parties will have to hold talks to try to form a government coalition. An alliance between the SPD, the Greens and the FDP liberals appears to be one of the most plausible scenarios. The US Congress must also reach an agreement on the debt ceiling before the beginning of October in order to avoid a shutdown of the federal administration in the US. Energy stocks were buoyed by rising oil prices. In Paris, TechnipFMC gained 6.5%, ahead of CGG (+5.7%) and Vallourec (+4.9%). TotalEnergies gained 3.4%. In London, Shell gained 4.5% and BP 3.5%. Plastic Omnium (-3.5%) lowered its annual outlook on Friday evening due to the shortage of semiconductors. Office-landlord and WeWork competitor IWG rose nearly 5%. Travel stocks rallied. International Consolidated Airlines Group rose 5.9% and Aeroports de Paris climbed 6.2%. Rolls Royce jumped 11%, rising for a second trading session after the jet-engine maker won a deal to supply the U.S. Air Force fleet of B-52 bombers.
Major U.S. indexes turned in a mixed performance Monday as stocks closely tied to the economy got a boost while shares of technology and other growth firms slipped. The Dow Jones Industrial Average added 71.37 points, or 0.2%, to 34869.37, as energy and financial shares led the trading session. The S&P 500 declined 12.37 points, or 0.3%, to 4443.11, while the Nasdaq Composite fell 77.73 points, or 0.5%, to 14969.97 on the weakness in tech.Facebook shares, however, recovered after being dragged down in early trading by the California-based social media giant announcing Monday it will pause the development of its Instagram for kids project. Shares of the social-media firm ended Monday up 62 cents, or 0.2%, to $353.58. Meanwhile, Alphabet Inc. ’s Google started its appeal Monday to overturn a $5 billion antitrust fine imposed by the European Union, contending that its Android operating system for mobile devices has boosted competition rather than foreclosing it. Shares declined $22.86, or 0.8%, to $2,821.44. Shares of energy stocks gained as supply constraints continued to draw on inventories around the world and the rally in natural gas prices also pushed up crude, according to ANZ Research analysts. Crude oil prices rose 2% to $75.45, hitting the highest level since October 2018. Occidental Petroleum Corp. jumped $2.09, or 7.4%, to $30.19, Marathon Oil Corp. rose 81 cents, or 6.3%, to $13.66 and Valero Energy Corp. climbed $3.15, or 4.7%, to $70.78. Special-purpose acquisition company Gores Guggenheim rose 47 cents, or 4.7%, to $10.45 after it agreed to merge with Swedish electric-vehicle maker Polestar in a $21 billion deal. Fresh data showed a 1.8% rise in new U.S. orders for durable goods in August, stronger than economists expected, as business investment and consumer spending picked up.
Japanese stocks were slightly lower as falls in tech and shipping stocks offset gains in energy and auto shares. The Nikkei Stock Average was down 0.4% at 30123.64. South Korea's benchmark Kospi edged 0.1% lower to 3131.07 in early trade, as biotech and internet stocks retreated on profit-taking, which offset gains in energy shares. Hong Kong stocks were higher in early trade, as Chinese property developers continued to recover from last week's steep losses amid the sector's liquidity concerns. The benchmark Hang Seng Index gained 0.6% to 24355.96, led by Country Garden's 4.1% jump. Chinese stocks were mixed in morning trade, as the market quickly tracked up from its opening losses. The benchmark Shanghai Composite Index was up 0.2% at 3590.71, while the ChiNext Price Index gained 0.3% to 3240.01. The Shenzhen Composite Index was the only decliner, edging 0.1% lower to 2404.38.
The yield on the benchmark 10-year U.S. Treasury note topped 1.5% for the first time since June, lifted by optimism about the economic outlook and the prospects of tighter monetary policy. The 10-year yield, which helps set borrowing costs on everything from corporate debt to mortgages, traded above 1.5% before closing at 1.482% Monday, according to Tradeweb. That compares with 1.459% Friday. The move extends a shift higher that began after the Federal Reserve’s meeting last week, when officials indicated they could start paring monthly bond purchases as soon as November and raising interest rates next year. Bond yields, which rise as prices fall, tend to climb when investors expect the Fed to raise rates, hurting the value of debt outstanding with lower coupon payments.
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