Posted inEverything Vegas

Is Cosmopolitan of Las Vegas Up For Sale or Sold?

7 Comments

I was looking to see if Cosmopolitan of Las Vegas (full name for Google) reported earnings last week. I knew they were going to be delayed, but I haven’t heard anything and was curious. I didn’t find earnings because they haven’t been reported. That can’t be good.

In that search I found an article about Deutsche Bank that made me think. Deutsche Bank own, or owned, Cosmo. I don’t quite understand corporate financial transactions, but from what I gather in this Bloomberg article is that Cosmopolitan was up for sale along with a group of other *temporary* assets.

Deutsche Bank AG (DBK) will probably book an additional charge of as much as 400 million euros ($528 million) tied to the sale of Actavis Group hf to Watson Pharmaceuticals Inc. (WPI), people familiar with the process said….

…Actavis is part of 12.2 billion euros of non-strategic assets Deutsche Bank holds at its corporate investments unit, according to the company’s report for 2011, published in March.

The unit also includes the Cosmopolitan Resort & Casino in Las Vegas, which the bank foreclosed on in 2008 when developer Ian Bruce Eichner defaulted on a loan, and a stake in Canadian port operator Maher Terminals, which it agreed to acquire in 2007. The units are all held for “investment purposes on a temporary basis,” according to the report for 2011.

I’m more of a marketing person, than an economics person so forgive me if I misinterpret the article. That said, if I read this correctly Cosmo was sold to Watson Pharmaceuticals Inc. as part of a larger sales of assets by Deutsche Bank. If the Cosmo was actually sold to a drug company look for it to be flipped again pretty quickly.

I’m not much for mainstream media and it’s no surprise to me that this story is conflicted with a Financial Times article which says that Cosmo is NOT going to be a part of this deal.

Deutsche Bank also owns Cosmopolitan, a Las Vegas resort and casino scheme that went into foreclosure in 2008, and Maher Terminals, the terminal operator it acquired in 2007.

However, the bank is unlikely to pursue a sale of those companies before 2013 because of difficult conditions for mergers and acquisitions.

The fact that the fortunes of Cosmopolitan and Maher Terminals are strongly tied to the state of global trade and the health of the economy will stall any sales, people familiar with the situation said.

Cosmo being sold to this drug company or is being held for another buyer for another buyer is almost irrelevant since the casino isn’t destined to be run by a drug company.

If FT is correct, we shouldn’t expect a sale until next year. If Bloomberg is right, Cosmo was sold and is likely to be sold again. Tomorrow I’ll hypothesize with a new owner.

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7 Comments

  1. Jay
    May 9, 2012,

    I’m all but certain you’re misreading the Bloomberg article. This part is the key: “Actavis is part of 12.2 billion euros of non-strategic assets Deutsche Bank holds at its corporate investments unit […] The unit also includes the Cosmopolitan Resort & Casino in Las Vegas.” The entire corporate investments unit was not sold; Actavis was sold, which was located in the corporate investments unit along with Cosmopolitan.

    That being said, this does reinforce the fact that Deutsche Bank considers the Cosmopolitan to be a “temporary” investment, and so I’d be very surprised if they hang on to the place any longer than they have to.

    • Marc
      May 9, 2012,

      Thanks Jay. That makes sense with the conflicting FT article that says it won’t be sold until 2013.

  2. Scott
    May 9, 2012,

    Apparently you can’t ready very well either.

  3. nick
    May 9, 2012,

    HOOKED ON PHONICS WORKED FOR ME!

  4. baccarat_guy
    May 10, 2012,

    The are going to sell it to the owners of Revel. Then they are going to re-brand Revel, The Cosmopolitan – East. Then they are all going to sit around in a big board room and wonder why their casino revenues are so low.

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