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Investing.com -- Allegiant Travel Company (NASDAQ:ALGT) stock jumped 3.2% while Blackstone Inc (NYSE:BX) shares edged up 0.2% after news from Bloomberg that Blackstone has agreed to purchase Allegiant’s Sunseeker Resort for approximately $200 million.
The deal, which could be announced as early as Monday according to Bloomberg, values the Florida resort significantly below the $720 million Allegiant spent developing the property. The report cites people familiar with the matter who asked not to be identified.
Allegiant has been actively seeking to sell the 785-room Port Charlotte resort for about a year, formally announcing in July 2024 that it had retained an adviser to explore options for the property. The parent company of Allegiant Airlines originally built Sunseeker to expand its travel business into the hospitality sector.
However, the ambitious project faced numerous challenges, coming in over budget and opening four years behind schedule. The resort’s performance was further hampered by disruptions from the coronavirus pandemic and hurricane damage, resulting in returns that fell short of expectations.
Allegiant’s decision to divest the underperforming asset appears to be driving positive investor sentiment, while Blackstone adds another hospitality property to its extensive real estate portfolio at what appears to be a significant discount to development costs.
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