Chapter 2783 Big Profit

On the last day of September, the news that Blackstone sold Hilton Group and disposed of part of the commercial real estate it held shocked the entire Wall Street.

Some people were shocked by Blackstone's decisiveness. You know, after urgent consultations among all parties, Paulson's rescue plan will once again pass the House of Representatives on the 2nd.

Some people were shocked by Blackstone's losses. No matter how important and meaningful Su Shiming said this sale was, everyone could see their losses on the Hilton project.

When it was acquired more than ten months ago, it was $26 billion, but now it is only worth $5.6 billion!

A total loss of more than $20.4 billion!

Some people who knew the details of the original acquisition felt that the selling price was quite interesting, because, wasn't this the part of the money that Blackstone had paid when it acquired Hilton?

Some people were shocked by Blackstone's skills. They were able to let the bank group that had lent them money for this project reduce their debt by $3 billion at this time.

This is equivalent to reducing their losses by $3 billion.

More people who don't know the inside story are shocked by the deep impact of this crisis. It turns out that even a company like Blackstone can't hold on now, so it has to rush to sell assets?

Also, will commercial real estate become a taboo for investment from now on? Lehman died on this, and Blackstone, which had never failed in this regard, also suffered such a huge loss.

For this statement, Su Shiming really wanted to shed a sad old tear. Who would want to do this? Isn't it because of that traitor from Goldman Sachs who teamed up with outsiders to bully people? ...

But in any case, if there is action, there will naturally be an impact. Blackstone's behavior of vigorously shedding burdens and reducing debts was quickly recognized by the market. After the news came out, their stock price quickly rose by more than 7%!

…………

On the Goldman Sachs cruise on the Hudson River, Lloyd and Gary Cohen, who were going to the office building in New Jersey, sat in the open-air seats at the stern.

From this angle, Manhattan under the blue sky and white clouds is as spectacular and beautiful as many people dream of.

But the two of them didn't even look at it.

Gary Cohen put down the newspaper in his hand, threw his briefcase on it, and smiled, "Blackstone really spent a lot of effort on public relations this time."

Lourdes touched his head, which didn't have much hair, "This is completely foreseeable. Don't you realize how shameless Su Shiming is?"

For the two of them who knew the inside story, the news disclosed in the newspaper, including the terms in the agreement, were really different from the actual situation.

In fact, Feng Yiping's final acquisition price was a little higher than 17%, but it was only 5 billion US dollars. In order to explain to shareholders - at least I kept the company's original investment amount, Su Shiming asked them to increase it to 5.6 billion US dollars.

And this extra 600 million US dollars would definitely not be paid by Feng Yiping, but they also proposed a solution to deduct it from the commercial properties that were used to pay off Feng Yiping's debts.

The reason why he could do this was because in February last year, another acquisition project of theirs, which spent nearly 39 billion US dollars to acquire EOP, the largest commercial real estate company in the United States, had already achieved profitability.

Within four months after acquiring EOP, Blackstone had recovered $28 billion by quickly splitting and selling half of EOP's commercial real estate.

They sold properties worth only more than $19 billion at a high price of $28 billion, or, they only dealt with half of the assets and recovered more than 70% of the investment... No matter which accounting standard is used, it is a big profit project.

But considering that the remaining half of EOP's real estate is still an asset that no one cares about, on the basis of the profit, these difficult-to-liquidate assets are sold to reduce the company's debt. Some of the plans proposed by Su Shiming, such as giving an 80% discount on the current price, are obviously not difficult to get the approval of the board of directors...

This can also be regarded as a win-win workaround. Su Shiming won face and Feng Yipingfang won the inside.

Cohen looked at his boss and suggested, "Why don't I call the TV station and ask them to find a few experts to talk about the impact of selling Hilton on Blackstone's investment strategy in the hotel industry?"

If Su Shiming knew what Cohen was planning at this time, he would jump out of the sky in a helicopter and fight him to the death.

Because Hilton is the most important part of Blackstone's layout in the hotel industry.

LXR luxury resorts are too high-end and target limited users, while the economy hotel chain La Quinta has many users, but its profits are limited because of its low price.

Luxury hotels like Hilton are not only an important part of Blackstone's full chain of high, medium and low-end hotels, but also their main source of income in the hotel industry.

And their sale of Hilton naturally means failure in integrating the hotel industry.

If the market interprets such information, then Blackstone's stock price will not rise by 7%, but may fall by 8%.

In this series of transactions, Su Shiming, who actually did not take any advantage, how could he accept such a result?

Lourdes thought for a while and shook his head, "Forget it,"

Cohen quickly understood what his boss meant, "Yes, at this time, such analysis cannot completely defeat Blackstone,"

The current situation is that Blackstone's stock price has risen by more than 7%. Even if the rumors about Blackstone's failure in integrating the hotel industry are spread, Blackstone's stock price may remain the same as before.

Considering that the rescue plan is being pushed forward intensively, it is not realistic to use this to knock Blackstone down on the road to victory.

And Cohen knows his boss's tactics very well. To sum it up simply, it is either not to do it, or to do it, you must kill the opponent to eliminate future troubles.

Otherwise, if you strike this one today and sneak attack that one tomorrow, although it has a certain impact on their strength, it has not completely ended one. The final result is that they are surrounded by enemies. That is, no matter how strong Goldman Sachs is and how strong its influence in the political world is, it is afraid that two fists cannot beat four hands.

Therefore, if you want to do it, you have to take advantage of the situation and make a small move, just like what they did to Bear Stearns and Lehman not long ago. The move is not big, but it is all on their deadly points. Therefore, a slight move will make them doomed, and there is no possibility of revenge on Goldman Sachs.

Lloyd shook the newspapers in his hand, took another look, rolled them up and threw them into the trash can beside him, "Don't you think that Feng has appeared more in this crisis than those of us on Wall Street?"

Cohen couldn't grasp his boss's pulse this time. What does this mean? Is the boss going to deal with Feng Yiping?

But at least now, we are in the same boat.

So he said something that must be right, "Feng's gains in this crisis really make us feel ashamed and jealous,"

Lloyd nodded when he heard it, that was really jealous!

According to the CDS contract, Feng Yiping's joint fund's income exceeded 20 billion US dollars-this is not considering the subsequent income.

For example, Lloyd knew that the shares of ICBC that Goldman Sachs had transferred to Feng Yiping would definitely appreciate in the future.

And the benefits of acquiring Hilton this time also made him jealous.

First of all, Hilton, which was worth 26 billion US dollars last year, was acquired by him for 5 billion US dollars.

Secondly, he bought the $20.5 billion loan from the bank group at an average discount of less than 60%, that is, at most $12 billion. In the end, Blackstone was only exempted from $3 billion, which is still worth $17.5 billion. The profit from this part is another $5.5 billion.

But it should be said that this part is more than $5.5 billion, because if there is no loan, then some of the profits from the original contracts of the United Fund may not be recovered.

Secondly, the prices of the real estate of EOP taken over from Blackstone are so low that they may appreciate by next year.

Of course, the most important gain is Hilton.

If calculated from the books, the acquisition of Hilton means that Feng Yiping has earned at least $10 billion - Blackstone originally acquired Hilton at a premium of 40%, which means that Hilton was worth $15.6 billion at that time.

But in the long run, it is far more than that.

After this crisis, when Hilton is IPOed, the gains at that time will be more than $10 billion?

All these added up, as far as they know, Feng Yiping's gains in this crisis, not to mention 50 billion US dollars, but definitely not less than 40 billion US dollars!

I have to admire him, so I have to be vigilant.

Seeing Su Shiming unable to fight back under Feng Yiping's arrangement, Lold was happy, but in fact, he also felt a little sad, the sadness of the same kind.

He turned his head, and the Blackstone office building in New Jersey was right in front of him. A sigh quietly dissipated in the wind of the Hudson River...