Blackstone Group, a private equity firm based in the United States, intends to acquire Gramercy Property Trust at a price of $7.6 billion in an all-cash deal. The U.S. private equity firm will purchase all of Gramercy’s outstanding common shares at a per-share price of $27.50. This will represent a 23% premium relative to the volume-weighted price of the share for a 30-day period ending earlier this month. The board of trustees of Gramercy have approved the transaction unanimously.
“… we are very pleased to enter into this transaction … this validates the quality of the portfolio and platform that we have built. Entering into this transaction with Blackstone fulfills our Board of Trustees’ mission to maximize shareholder value,” said Gramercy’s chief executive officer and trustee, Gordon DuGan.
Customary closing conditions
The deal is expected to be concluded in this year’s second half after customary closing conditions and this includes getting the consent from the shareholders of Gramercy who are scheduled to vote on the deal during a special meeting which is yet to be announced. Shareholders of Gramercy will get the second quarter dividend amounting to $0.375 per share in mid-July as had been previously announced. If the deal is concluded after mid-October this year shareholders of Gramercy will get a per diem totaling $0.004 a share for every day commencing on October 15 this year until the transaction closes.
In the transaction the exclusive financial advisor of Gramercy is Morgan Stanley while the company’s real estate consultant is Eastdil Secured. Gramercy’s legal advisor on the other hand is Rosen & Katz. In the case of Blackstone the financial advisors are Bank of America Merrill Lynch and Citigroup Global Markets while the PE firm’s legal advisor is Simpson Thacher & Bartlett LLP.
This comes in the wake of reports indicating that the acquisition of a controlling interest in the F&R unit of Thomson Reuters will be concluded in late summer this year. While July 1 had been the targeted date regulatory requirements have made that possibility highly unlikely. Blackstone’s intention to acquire a 55% interest in the F&R unit of Thomson Reuters was announced earlier this year on January 30.
To back the $20 billion acquisition Blackstone is expected to launch a debt deal worth approximately $13.5 billion in early September when the market is expected to have reconvened following the summer holiday in August. Wall Street firms which are leading the deal include Citigroup, Bank of America Merrill Lynch and JP Morgan.