Starwood Capital Group has agreed the terms of a £673.5m takeover deal for Balanced Commercial Property Trust (BCPT).
The boards of Starwood Capital’s bidding vehicle Starlight Bidco and BCPT said they have reached an agreement on a recommended cash offer to be made by the bidco for the entire issued and to be issued share capital of BCPT.
The cash consideration represents a premium of approximately 21.5% to the closing price of 79p per BCPT share on 12 April 2024 and values the entire issued and to be issued share capital of BCPT at approximately £673.5m on a fully diluted basis.
Starwood said BCPT had a “high-quality, attractive and diversified real estate portfolio”. It added that given BCPT’s scale and constrained access to capital, it believed that “the full potential of the business is best achieved as a private company under the control of Starwood as this will enable BCPT to realise maximum value from its portfolio”.
The board of BCPT said the acquisition “enhances value for BCPT shareholders, with the cash consideration representing a material premium to BCPT’s undisturbed share price”. As a result, the directors of BCPT intend to unanimously recommend that shareholders vote in favour of the takeover deal.
Paul Marcuse, chairman of BCPT, said: “The BCPT board has explored a range of potential options for the company, including continuation with a revised strategy, a managed wind-down of the portfolio and the partial or full sale of BCPT’s share capital or assets. The BCPT board is pleased with the interest shown in the company and its portfolio by various credible third parties during the strategic review, which represented a range of sources of capital (including UK institutional capital, private equity investors, listed real estate peers and asset managers). The BCPT board has carefully considered each of the company’s strategic options, benchmarked against the likely returns that could be achieved in a managed wind-down.
“Following careful consideration, and having taken independent third-party advice, we believe that the proposed transaction with Starwood offers a successful outcome for our shareholders, offering a full cash exit at a significant premium to BCPT’s undisturbed share price. We, the BCPT board, therefore intend to recommend unanimously that BCPT shareholders support the acquisition at the court meeting and the general meeting, details of which will follow in due course.”
Matthew Parrott, managing director of Starwood, added: “We are pleased to announce the acquisition of Balanced Commercial Property Trust and to provide BCPT’s shareholders with a significant premium to the undisturbed share price. This acquisition by controlled affiliates of the Starwood Capital Group will increase our exposure to logistics and other high-conviction sectors and we look forward to supporting BCPT through our access to capital, scale, and operational expertise.”
