Deutsche Bank had to take a heckuva haircut but it finally rid itself of The Cosmopolitan Las Vegas for $1.7 billion and change. The buyer is private equity fund Blackstone Group, which paid a staggering 16.7X cash flow for this white elephant. “As part of our Strategy 2015+, the bank is committed to reducing its non-core legacy positions in a capital efficient manner which benefits shareholders,” said Deutsche Bank executive Pius Sprenger. A minority investor in Caesars Entertainment, Blackstone has never waded waist-deep into gambling like this. The immediate reaction from JP Morgan analyst Joseph Greff was “We … think this announcement speaks to a historically smart real estate buyer making a statement on the length of the LV Strip recovery, also a
positive.” The market did not share that sentiment. Also-rans in the Cosmo stakes were Penn National Gaming (which deemed it too expensive) and James Packer, who’s presumably still nursing that shiner he got in last week’s public brawl.
* All’s not well at Foxwoods Resort Casino, which is closing parts of its Rainmaker Casino floor during the slow hour — meaning you’ll have to go somewhere else to ‘make it rain.’ In what sounds like a precursor of layoffs to the 6,000-person workforce, Foxwoods said there would be “staffing changes across all levels of employment.”
* Ken Adams critiques the stranger-than-fiction casino-approval saga in Massachusetts and finds the appropriate metaphor: a three-ring circus.