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Blackstone enters into agreement to acquire IOF
Posted on Wednesday, 13 June 2018 09:59
Blackstone and Australian real estate investment trust Investa Office Fund (IOF) have entered into a scheme implementation agreement weeks after the private equity giant tabled a AUD 3.10 billion (USD 2.36 billion) proposal for the company.

Under terms of the transaction, the buyout group is offering AUD 5.15 per share, representing a 13.2 per cent premium to the last unaffected closing stock price of AUD 4.55 on 25th May 2018.

Blackstone put its cards on the table just two weeks ago making an unbinding and unsolicited offer and has since entered into due diligence to acquire IOF.

The scheme is expected to be implemented in late August, subject to a number of conditions, including the backing of more than 75.0 per cent of investors.

News comes just two years after IOF rebuffed an AUD 2.50 billion offer from Australia’s DEXUS.

Shares in the company have gained over 10.0 per cent since Blackstone’s bid went public and the group is now trading at AUD 5.14 as of 13th June 2018, valuing the business in excess of AUD 3.00 billion.

Reuters was among those that reported on the potential takeover of IOF, with the news provider suggesting the private equity firm sees strong growth in the Australian property market, particularly on the east coast.

The Sydney-focused commercial real estate group claims to be one of the country’s largest owners and managers of institutional-grade office properties, controlling assets worth more than USD 11.00 billion.

Founded in 2000, IOF provides spaces to over 800 businesses with 37 locations owned, or managed, throughout Australia.

Around the time Blackstone tabled its offer for the group, it also agreed to pick up an office portfolio in Auckland, New Zealand, controlled by Goodman Property Trust and Singaporean investor GIC for NZD 635.00 million (USD 482.51 million based on current exchange rates).

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 16 deals targeting the Australian real estate industry announced since the start of 2018.

The largest such transaction involved China Merchants Port Holdings buying a 50.0 per cent stake in Port of Newcastle entities from China Merchants Union and Gold Newcastle for AUD 607.50 million.

© Zephus Ltd