Blackstone Eyes Recapturing Anbang Insurance Assets Including Waldorf

February 13, 2018

Blackstone Group LP, which scored big four years ago when a company it owned sold New York’s Waldorf Astoria hotel for a record-setting price to a little-known Chinese insurer, may soon get a chance to own the iconic landmark again.

The U.S. private equity firm has held initial discussions about bidding for Anbang Insurance Group Co. assets in a sale overseen by the Chinese government, people with knowledge of the matter said. The assets include the Waldorf as well as Strategic Hotels & Resorts Inc., which Blackstone sold to Anbang in 2016, said the people. Blackstone’s deliberations are at an early stage and the firm could refrain from bidding for any assets, one person said.

Anbang is among a crop of Chinese serial acquirers that spent tens of billions of dollars snapping up trophy assets over the past few years, only to lurch into turmoil once their strategies backfired. Blackstone was one of the biggest beneficiaries of Anbang’s largesse, selling at least a combined $9.5 billion of assets to the insurer, data compiled by Bloomberg show.

China’s government has cracked down on its most prolific dealmakers, bringing their overseas acquisitions to a screeching halt. Anbang’s Chairman Wu Xiaohui was detained by authorities in June and a working team that included China’s insurance regulator was subsequently dispatched to Anbang to oversee the company’s operations and ensure its stability, people familiar with the matter said in January. In addition, the government is seeking to broker the sale of a stake in the insurer.

Last year, China asked the insurer to sell its overseas assets, people with knowledge of the matter said, an account that Anbang and regulators disputed at the time. An Anbang representative reiterated on Monday that the company doesn’t have plans to sell its overseas assets.

Charlotte Bilney, a Hong Kong-based spokeswoman for Blackstone, declined to comment. The China Insurance Regulatory Commission didn’t immediately return a request seeking comment.

Record Deal

Anbang acquired the Waldorf for $1.95 billion from Hilton Worldwide Holdings Inc., the highest price for a single existing U.S. hotel, translating into a huge windfall for Blackstone — then the majority owner of Hilton. The hotel company was approached by Anbang and two other potential buyers before the property was officially up for sale, a person with knowledge of the process said at the time. Blackstone executive Tyler Henritze worked on the transaction, Bloomberg News reported in 2015.

Less than two years later, Blackstone sold its stake in Hilton to HNA Group Co., another Chinese mega-acquirer which is now trying to offload assets to alleviate financial pressures.

In 2016, Blackstone agreed to sell Strategic Hotels to Anbang for about $6.5 billion, about $450 million more than what it paid for the U.S. luxury-resort company just a few months earlier. Blackstone can point to other China connections too: China’s sovereign wealth fund invested in the private equity firm’s 2007 initial public offering, and last year purchased Blackstone’s European logistics property business Logicor for $13.8 billion.

Anbang also acquired the office portion of 717 Fifth Avenue in New York from Blackstone in 2015, months after its Waldorf purchase. That building, located at the corner of 56th Street in Midtown’s Plaza district, serves as Anbang’s U.S. headquarters.

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