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1. Bank Shares Continue to Slide as Credit Suisse Sees 30% Drop in Share Value
Following the collapse of three banks over the weekend, shares in and the value of financial institutions have continued to fall. Shares of Zurich-based bank Credit Suisse have fallen by approximately 30%, a new low for its share price, according to The New York Times. On Feb. 9, the bank announced losses of approximately $8 billion, its largest loss since the 2008 financial crisis. Sources say that Credit Suisse’s problems might be singular and that the European banking system did not have the same exposure to the failing Silicon Valley Bank, whose collapse started this latest crash.
The Financial Times Stock Exchange has seen its value fall by 6% in the last week to reach a three-month low, and the Standard & Poor’s 500 fell 1.6% on today’s opening. Website Proactive Investors said the Saudi National Bank, Credit Suisse’s largest backer by percentage investment, “sparked the freefall in the Swiss bank’s shares” with its comments that it could not add capital due to regulations stating it cannot hold more than 10% of the bank. It currently owns 9.8%.
Argentina, meanwhile, is suffering economic woes of its own, with its inflation rate passing 100% for the first time since it suffered from another round of hyperinflation in the late 1990s. Official statistics said in February the official rate of inflation in the South American country was 102.5%, according to bilingual news website La Prensa Latina.
2. Raines Acquires Management Company HP Hotels
Hotel developer, management company and investor Raines has acquired third-party hotel management company HP Hotels, HNN's Trevor Simpson reports. The acquisition adds 27 hotels to Raines' management portfolio, which now stands at 49 hotels in eight states across seven brands.
“In addition to acquiring third-party management contracts, Raines is adding experienced principals, trusted partnerships, and operations, sales and marketing and human resources teams to its arsenal of experienced hospitality professionals,” said Grey Raines, managing partner of Raines.
HP Hotels' leadership will remain with Raines as part of the deal. Kerry Ranson, HP Hotels' co-founder and CEO, will take over as Raines’ president of operations.
3. Corporation Tax Increases and Childcare Initiatives Star in UK Budget
In the United Kingdom’s 2023 budget outlined on Wednesday, corporation tax, as expected, was increased from 19% to 25%, but the government also put into place free childcare in an effort to persuade young parents to return earlier to the workforce, according to the BBC.
U.K. Chancellor of the Exchequer Jeremy Hunt hopes initiatives such as providing 30 hours a week of free childcare for one- and two-year-olds, not just for three- and four-year-olds; extending government help with energy bills until the end of June, and creating 12 new investment zones across England will help bolster the economy.
The budget announcement comes as the U.K. entered yet another week of widescale strike action, this week mostly covering the nursing and transport sectors. Both employees of national rail and London Underground services will be on strike on Wednesday, Thursday and Saturday.
Kate Nicholls, CEO of UKHospitality, said the combined action could cost U.K hotels and restaurants up to 600 million pounds sterling ($724 million) in lost business.
4. Blantyre and Fairtree Acquire Scotland’s Crerar Hotel Group
London-based special-situations investment fund Blantyre Capital and its operating partner, Bath, England-based Fairtree Hotel Investments, have acquired Edinburgh-based Crerar Hotel Group and its seven hotels for an undisclosed sum, according to Scottish licensed-trade magazine Dram.
Blantyre and Fairtree established their joint venture in 2021 and already own Fonab Castle and Dunkeld House Hotel, both in Perthshire, Scotland, and Daffodil Hotel & Spa in Cumbria, England. The Crerar acquisition also comes with a five-room, self-catering cottage.
5. Blackstone Acquires Meetings, Events Firm Cvent For $4.6 Billion
On Tuesday, private equity firm Blackstone announced it has agreed to acquire meetings, events and hospitality technology provider Cvent in a deal valued at $4.6 billion, HNN's Dana Miller reports. As part of the transaction, a wholly owned subsidiary of the Abu Dhabi Investment Authority will be a minority investor.
Online provider Cvent is a leader in managing meetings and events for more than 22,000 clients around the world in the hospitality, corporate, nonprofit and higher education sectors and lists more than 302,000 hotels and venues on its platform. Cvent stockholders will receive $8.50 per share in cash under the terms of the agreement.