Blackstone has agreed to buy Valad Property Group in a deal that values the struggling Australian property company at A$207m (£136m).
The US private equity giant has offered A$1.80 cash per share and will take on almost A$600m of debt as part of the deal, which is subject to a shareholder vote in mid-July.
The offer was a 56% premium to the A$1.15 share price before the takeover talks. Shares jumped to A$1.75 after the agreement was announced.
The deal crystallises millions of dollars of losses for long-term shareholders who bought the stock which peaked at A$49 – implying a market capitalisation of A$3bn – in 2007 during the property boom.
Valad’s properties under management soared from A$6.6bn to A$17bn at the peak of the market in 2007 following its A$2bn deal to buy Kevin McCabe’s London-based property fund management company, Scarborough.
A year later, the group, which now has A$8bn of assets under management, had to carry out a significant refinancing of its growing debt pile.
Valad’s acting chief executive, Clem Selwin, said the Blackstone offer was the best possible outcome to “maximise valid shareholder value”.
Other options included an orderly wind-up of the company, an equity raising, and the sale of selected assets.
The firms entered talks last week following the collapse in March of a £52m management buyout bid for Valad’s European business involving chief executive Peter Hurley.
Hurley, who had been on leave since December while the MBO offer was considered, has since resigned from the firm on “mutually agreed terms” with a termination payment of A$940,000.
The Valad takeover is Blackstone’s second deal with a troubled Australian property firm this year, after the buyout giant paid $9.4bn to Centro Properties for nearly 600 US shopping malls in March.
