Blackstone close to £700m deal for commercial landlord Industrials REIT
US private equity giant Blackstone is close to a £700m take-private deal with London-listed commercial landlord Industrials REIT as it ramps up its bargain hunt on UK property firms.
In a statement this morning, Industrials REIT said that after a “period of extensive negotiations” it had struck an agreement on the key terms of an all-cash offer for the firm at 168p per share.
The terms of the deal mark a 42.4 per cent premium on Friday’s closing price and come at a value the firm has not traded at since September. Shares in Industrials REIT tumbled sharply through the Autumn as fears of spiralling industrial property prices and interest rate hikes sparked a sell-off from investors.
The terms of the offer would value the firm around £700m, according to Bloomberg.
Bosses at Industrials REIT have told Blackstone that they would likely recommend the deal to their shareholders.
The two companies are looking to give an update on the offer before 14th April.
Investment bankers at Rothschild are advising Blackstone on the deal.
The acquisition is the latest swoop from the New York private equity titan as it looks to capitalise on a slump in prices to buy up swathes of property at slashed prices.
Blackstone has also struck previous take-private deals on listed industrial-focused property vehicles, buying listed property firm St Modwen for £1.3bn in June 2021 and Hansteen for £500m in 2019.
Analysts at Peel Hunt said the deal looked to be a positive one for shareholders given a tricky backdrop for industrial assets.
“The price, at a small premium to the September [net tangible assets] per share […] looks very good given that industrial asset values have fallen by 22 per cent since then, according to the CBRE monthly index,” Peel Hunt said.
It added that the news provides positive “read-across to other REITs owning industrial assets”, including Warehouse REIT, LondonMetric Property and Harworth.
At the time of reporting, shares in Warehouse REIT had jumped over three per cent, while LondonMetric and Harworth rose by 1.08 per cent and 3.8 per cent respectively.