The world’s largest private-equity firm will pay A$1.80 a share, 56 percent more than Valad’s closing price on April 27, the Sydney-based company said in a statement. The purchase values the owner of Australian office buildings and industrial properties at A$208 million ($227 million), according to Valad spokesman Ian Pemberton, principal at P&L Corporate Communications. Blackstone will also assume some A$600 million of Valad’s liabilities, Pemberton said.
The deal follows Blackstone’s $9.4 billion March agreement to buy the U.S. shopping centers of Australia’s Centro Properties Group. (CNP) For Valad shareholders, who watched the stock sink 99 percent in the 22 months to March 2009, it offers a way out after the company struggled to pay off debt after the value of its assets tumbled through the financial crisis.
“In the absence of another bid, this is the lesser of the two evils,” said Winston Sammut, managing director of Sydney- based Maxim Asset Management Ltd. “If there was a wind down of the company, it’s doubtful whether shareholders would be able to get that price.”
Valad’s shares soared 52 percent to A$1.75 as of the 4:10 p.m. close in Sydney, the most since December 2002. The shares peaked at A$42.92 in May 2007, then slumped to 44 Australian cents in March 2009. Blackstone shares fell 1.7 percent to end the day at $19.15 in New Yorkyesterday.
Deploying Capital
Stephen Schwarzman, Blackstone’s chairman and chief executive officer, told investors on a March 8 conference call that the New York-based buyout firm will continue to “aggressively deploy capital” in real estate as prices recover with the economy. A fourfold increase in profit from its real estate funds helped Blackstone post its best quarterly results since going public in 2007, the company said on April 21.
Centro is Blackstone’s largest real estate deal since 2007, when it bought the hotel chain since renamed Hilton Worldwide and Equity Office Properties Trust. Both Centro and Valad struggled to repay debt after the global property market tumbled from late 2007 to 2009.
Valad oversees about A$8 billion of real estate, including office buildings and industrial properties, mainly in Australia, according to its website. It also manages unlisted property funds in Australia and Europe.
Board Recommends
Peter Hurley resigned as managing director of Valad on April 18 after his proposal for a management-led buyout of the company’s European unit failed. Valad in December called the proposal “incomplete.”
Valad bought more than A$2 billion worth of properties in 2007. While it has sold off some of them and raised new equity to repay loans since then, the company has struggled to cut debt, reporting a A$50.7 million net loss in the six months to December.
Valad’s board unanimously recommended Blackstone’s bid “in the absence of a superior proposal,” the company said in today’s statement.
Blackstone bought A$165 million of Valad convertible notes from Kimco Realty Corp. (KIM), New York-based Kimco said in a statement on April 27.
Buying Valad adds to Blackstone’s acquisitions last year of 180 warehouse properties from Denver-based ProLogis (PLD) and investments in hotel chain Extended Stay Inc. and mall owner General Growth Properties Inc. (GGP) With the Valad purchase, Blackstone adds buildings from the Gold Fields House in Sydney’s center to the MacGregor Mega Center in Brisbane. In November, Blackstone took over the management of $2 billion of Asian real estate assets from Bank of America Merrill Lynch.
Blackstone is planning to raise its next real estate fund, with a target of about $10 billion, later this year. The company has the largest real estate business of the big private-equity firms, with $33.2 billion under management at the end of 2010.
source from: bloomberg
No comments:
Post a Comment