Housing Posts Impressive Digits; Banker Gone Bad; Anbang: Be Our Guest!

Pending your review…

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The National Association of Realtors is presumably in good spirits today thanks to some fantastic data from pending sales on previously-owned homes. Turns out, that figure is up 3.5%, with the pending home sales index clocking in at 109.1. That’s a nice little welcome after the previous month’s cringe-inducing 3% decline and index reading of 105.4, which by the way, was larger than the initially reported figure. It also marks a 5% increase in sales over the same time last year. What’s even better about this increase is that analysts only predicted sales would go up 1.2%. It’s always kind of fun when analysts get it wrong like that. With employment gains, a healthy labor economy and low borrowing costs, sales are up in most parts of the United States. Unfortunately, not in the Northeast where sales took a super-slight dip. But the Midwest more than made up for it by kicking up 11.4%. The median price of an existing home now stands at $210,800. Previously-owned homes make up 90% of the housing market and there was a nice supply of about 1.88 million homes up for grabs in February.

Bankers behaving badly…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

It’s been a bad day for Andrew Caspersen and he’s got a whole bunch those ahead of him. Caspersen, who was until very recently a partner at PJT Partners, was arrested for trying to defraud investors out of $95 million. Apparently, the misbehaved banker raised money using all kinds of fraudulent means and illegal tactics, including fake email accounts and even fake employees. He told an unsuspecting hedge-fund employee that he was looking to raise $80 million for a private equity fund so that it could buy stakes in companies owned by other private equity firms. Got that? He then explained that he already raised $30 million and, with that, the hedge-fund employee forked over $25 million from his hedge fund’s charity. The hedge-fund employee also ponied up an additional $400,000 from his own personal funds. The very smarmy Caspersen then took $8 million of his new found cash to cover money he already lifted from PJT – without authorization, of course. As for the rest of the money, Caspersen plopped it right into his own brokerage account. But the fun doesn’t stop there, because Caspersen lost all of it by trading stock options. After that, Casperesen hit up the hedge fund employee for another $20 million infusion, weaving into his tale the aformentioned fake employee, fake email address and domain. However, Caspersen told the hedge-fund employee that the fake employee worked for a very real private equity firm. The unnamed hedge-fund employee called the very real private equity firm to verify some details about the fake employee and that’s when Caspersen’s fraudulent cookie started to crumble. Classy, huh.

Ante up…

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You may not have heard of Anbang Insurance Group but you might just end up staying at one of their properties in the not too distant future. The China-based company, together with a consortium that includes J.C. Flowers & Co. and Primavera Capital, just raised their offer for Starwood Hotels and Resorts, the company that also owns Sheraton hotels, the St.Regis and W Hotels, to a whopping $14 billion. All in cash. That price tag easily trumps Marriott International Inc.’s $13.6 billion offer. Anbang is willing to shell out $82.75 per share of Starwood, easily making Marriott’s $78 per share offer chump change in comparison. But, for now anyways, Starwood shareholders are still seriously considering Marriott’s offer and are set to vote on it come April 8. There’s no word yet on whether or not Marriott will even attempt to raise and match Anbang’s offer. But if Starwood does diss Marriott in favor of Anbang’s very generous and enticing offer, Starwood would have to fork over a $450 million break-up fee to Marriott. Marriott would really love to add Starwood to its collection, that also includes Ritz-Carlton, so that it could become the world’s largest lodging company, with over 5,700 hotels. But Anbang’s goal is to simply increase its real estate assets in the United States, like it did last year when it scooped up New York’s Waldorf Astoria to the tune of $1.95 billion. If Anbang does manage to snap up Starwood, whose real-estate is rumored to be valued at $4 billion, it would be the biggest acquisition by a Chinese company in the United States. Of course, a deal that big by a foreign investor would have to go through the ringer by the Committee on Foreign Investments in the United States (CFIUS), a group that basically reviews deals of this magnitude to determine if they pose a threat to national security. But spoiler alert: experts think it’ll pass muster.

 

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