Blackstone makes cash offer for Croesus Retail Trust
American private equity firm Blackstone has made a cash offer to privatise Croesus Retail Trust at $1.17 per unit in an all-or-nothing deal.
The offer price implies a $900.6 million equity value for the Japan-based retail business trust, which has a 113 billion yen (S$1.4 billion) portfolio of malls in Tokyo, Osaka, Hokkaido and other prefectures.
The buyout will be via a scheme of arrangement.
This means Blackstone needs more than 50 per cent of voting unit holders representing at least 75 per cent in value of the total voting units to agree to the buyout, which is expected to be completed by the fourth quarter of this year.
Croesus unit holders who accept the offer will also get to keep the September distribution of 4.06 cents per unit.
At $1.17 in cash for each Croesus unit, the offer is a premium of about 38 per cent over the volume-weighted average price of 85 cents per unit for the 12-month period up to April 25.
Croesus units jumped 12 cents or 11.37 per cent to $1.175 yesterday once trading resumed.
The $1.17 offer also translates to a price-to-book value of 1.23 times, better than the 1.03 times ratio that Saizen Reit reaped from another private equity player, Lone Star, for its portfolio of Japanese residential properties in 2015.
In comparison, Capitaland's final offer price for the privatisation of CapitaMalls Asia in 2014 worked out to a price-to-book value of 1.28 times, said Religare Capital Markets.
Analysts noted that Blackstone's offer exceeded all their price targets, making it an attractive one.
Mr David Lim, chairman and independent director of Croesus Retail Trust, said: "We are pleased to receive Blackstone's proposal... we believe the scheme provides an opportunity for our unit holders to realise their investment for cash at a significant premium."
Mr Lim is also an independent director of G.K. Goh Holdings, which is controlled by GKG Investment Holdings (GKGI). GKGI is Croesus' largest investor, with a 5.96 per cent stake.
Mr Christopher Heady, Blackstone's head of Asia real estate, said the deal was "a good opportunity for Blackstone's real estate business to expand its platform in Japan".
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