Blackstone has made a £1.2bn move to take developer St Modwen Properties private in the latest in a wave of takeovers in the listed real estate sector.
St Modwen, led since late last year by chief executive Sarwjit Sambhi, said it would recommend a takeover by Blackstone at 542p a share, if a firm offer is made. Blackstone is carrying out due diligence on the business and St Modwen said the parties are “working closely together” to complete the process “as soon as practicable”.
At the suggested price, the deal would represent a premium of 21.1% to St Modwen’s closing share price yesterday (6 May) and a premium of 23.8% to its reported 2020 EPTA net tangible assets per share of 438p.
Under takeover rules, Blackstone now has until 4 June to make a firm offer for the company.
Since the onset of the Covid-19 crisis, listed real estate companies including McCarthy Stone, Urban&Civic and RDI REIT have been taken private, with Globalworth Real Estate Investments also now in suitors’ sights.
“There is clearly a mismatch in pricing between the public and private markets – some of that is warranted, some of it isn’t,” Peel Hunt real estate analyst Matthew Saperia told EG earlier this year. “The public market probably tends to be a little more short-sighted than the private market, so other capital pools will be willing to look beyond the next two years and understand either value or demand for real estate that the equity market might be concerned about in the short term.”
Yesterday construction group John Laing confirmed that it is in takeover talks with private equity firm KKR.
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