It was only three weeks ago that Istithmar had put Barney's on the chopping block expecting to get not less than its full cost of $942 million. Well it didn't take long for them to realize that they would need to have Buffett's investment horizon in order to monetize at that offering price. As we speculated, the sale was borne out of a substantial need to raise cash, and as such it is quickly progressing into a full blown firesale. According to Bloomberg, 4 people familiar with the sale process have said bids are coming in the $350 to $600 million range, meaning Istithmar, which is owned by government owned Dubai World, will be lucky to get half of the price it paid for the ultraluxury retailer.“It’s a buyers’ market,” said John Guy, a fashion and luxury analyst with MF Global Securities in London. “The fact that luxury-goods stocks have fallen more than 30 percent in the past year is also going to weigh on expectations.”
Dubai had borrowed $80 billion to finance the emirate's transformation into a tourism and finance hub, however with oil now at $40, and absolutely no need for tourism and finance hubs in a 110 degree desert, the small country is quickly realizing how horribly wrong its strategy was, especially as Dubai CDS are going wider and wider by the day. Sphere: Related Content
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