Blackstone Real Estate and MRP Group Announce Commencement of an All-Cash Tender Offer for Terrafina

Rhea-AI Summary

Blackstone Real Estate and MRP Group have started an all-cash tender offer for Terrafina's real estate trust certificates at Ps.38.50 per certificate.

This represents a 21% premium over the unaffected price on December 4, 2023, and a 5% premium over the June 7, 2024 closing price.

The offer aims to buy up to 100% of Terrafina's certificates, providing immediate and certain value to shareholders. COFECE has approved the offer unconditionally, and it is not subject to financing or additional board and shareholder approvals.

The offer expires on July 10, 2024, at 14:00 Mexico City time, unless extended.

Positive

• The tender offer price is Ps.38.50, providing a 21% premium over December 4, 2023 price.
• The offer includes a 5% premium over the June 7, 2024 closing price.
• Approval from COFECE reduces regulatory risk.
• The offer provides immediate and certain value to Terrafina shareholders.
• The tender offer has no financing condition.
• No additional board or shareholder approvals are needed.

Negative

• Completion of the offer requires acceptance by holders of 50% plus one certificate.
• The expiry date of the offer is July 10, 2024, leaving time for decision-making.

Insights

Financial Analyst

The tender offer announced by Blackstone Real Estate and MRP Group for Terrafina certificates is highly significant for investors. The offer price of Ps.38.50 per certificate represents a 21% premium over Terrafina's unaffected price. This substantial premium indicates Blackstone's confidence in Terrafina's value and its willingness to pay a higher price to gain control.

From a financial perspective, such offers often lead to immediate stock price increases as the market adjusts to the new valuation. This can be beneficial for shareholders seeking short-term gains. The all-cash nature of the offer provides immediate liquidity and eliminates the uncertainties associated with stock-based or mixed offers.

Another important point is the limited closing conditions. With the offer receiving unconditional approval from COFECE and not being subject to financing or further approvals, the risk of the deal falling through is minimal. This certainty can be highly attractive to investors who are wary of potential deal-breaking conditions. Additionally, the avoidance of negative tax implications compared to exchange offers can be an added advantage for shareholders. Overall, this tender offer is a positive development for Terrafina’s stakeholders.

Market Research Analyst

This tender offer could signal broader market implications for the real estate sector in Mexico. Blackstone's strategic move to acquire Terrafina showcases its confidence in the Mexican real estate market. Investors should take note of such endorsements from global firms as they often point to underlying market stability and potential growth opportunities.

The premium offer and the certainty of cash payments provide a level of security that can be particularly appealing in volatile markets. Moreover, Blackstone's successful track record with public companies adds credibility to the deal, suggesting they have a well-thought-out strategy for Terrafina moving forward. This could lead to improved operational efficiencies and potentially higher returns on investment in the long run.

For retail investors, understanding that large institutional players are making significant moves in the market can offer a perspective on where to potentially allocate resources. However, it’s also essential to consider the long-term impacts, including any changes in Terrafina’s strategic direction post-acquisition.

Only announced all-cash offer to date, providing substantial, immediate and certain value to Terrafina shareholders

NEW YORK & MEXICO CITY--(BUSINESS WIRE)-- Blackstone Real Estate and MRP Group, a developer, owner and operator of real estate in Mexico, today announced that a Mexican trust formed by their affiliates has commenced a tender offer for up to 100% of the outstanding real estate trust certificates of Terrafina (BMV:TERRA 13) at a purchase price of Ps.38.50 per certificate.

The all-cash tender offer represents a premium of 21% over the unaffected price per Terrafina certificate at the close of trading on December 4, 2023 and a 5% premium to Terrafina’s closing share price on June 7, 2024.

As the only announced all-cash tender offer, this transaction would provide substantial and immediate value for Terrafina’s shareholders and avoids the potential negative tax consequences associated with competing exchange offers. Additionally, this offer provides more certainty given the limited closing conditions. With a track-record of over 50 successful public company transactions, Blackstone Real Estate is well-positioned to execute this transaction.

The Mexican antitrust authority, the Comisión Federal de Competencia Económica (COFECE), has unconditionally approved the tender offer. The tender offer is not subject to any financing condition and is not contingent on additional board or shareholder approvals.

Terrafina certificates may be tendered at any time until 14:00 Mexico City time, on July 10, 2024, unless the expiration date is extended in accordance with the Offer to Purchase referred to below. The completion of the tender offer is conditioned upon, among other things, the acceptance by holders representing at least 50% plus one of the outstanding Terrafina certificates.

Complete terms and conditions of the tender offer are set forth in the Offer to Purchase filed with the Mexican securities commission, the Comisión Nacional Bancaria y de Valores (CNBV). Please see below for information on how to obtain the Offer to Purchase and the accompanying Letter of Acceptance, and for who to contact with any questions regarding the tender procedures.

About Blackstone Real Estate

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has US $339 billion of investor capital under management. Blackstone is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, residential, office, hospitality and retail. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world. Blackstone’s Core+ business invests in substantially stabilized real estate assets globally, through both institutional strategies and strategies tailored for income-focused individual investors including Blackstone Real Estate Income Trust, Inc. (BREIT), a U.S. non-listed REIT. Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT).

About MRP Group

MRP Group was founded in 2003 and is a leading integrated platform focused on managing institutional capital in the Mexican real estate sector. To date, MRP Group has committed and managed investments of more than $4.8 billion through 14 funds. MRP Group is a development and operationally-focused entity comprised of professionals specializing in the evaluation, planning, financing, structuring, and execution of transactions within the cash-generating real estate asset space, all with a long-term vision. MRP Group is an active capital manager, directly involved in both the development, acquisition and operation of its projects and focused on commercial, hospitality and mixed-use properties, which has allowed it to obtain significant expertise.

About the Offeror

The tender offer is being made by CIBanco, S.A., Institución de Banca Múltiple, in its capacity as trustee under the trust identified with the number CIB/4338, of which BP MX Industrial Real Estate Holdco LLC and CIBanco, S.A. Institución de Banca Múltiple, in its capacity as trustee of the irrevocable management trust agreement identified under number CIB/4235, are settlors and beneficiaries.

Copies of Offer to Purchase and Tender Offer Queries

A copy of the Offer to Purchase is available free of charge in Spanish or English at https://www.cibanco.com/es/cibanco/servicios-fiduciarios-empresa.

If you have questions regarding the tender offer or tendering procedures, please contact:

• Morgan Stanley Mexico, Casa de Bolsa, S.A. de C.V., acting as Dealer Manager, at +52 55 5282 6748 or via email at Miguel.Perez@morganstanley.com; or

• Morrow Sodali, International LLC, acting as Information Agent, at +1 917 475 0281 or +1 800 269 4523 (in the United States) and +52 55 4169 6733 (in Mexico) or via email at opa@investor.morrowsodali.com.

Transaction Advisors

Morgan Stanley & Co and Santander are serving as financial advisors to Blackstone Real Estate and MRP Group. Simpson Thacher & Bartlett LLP and Galicia Abogados, S.C., are serving as legal advisors to Blackstone Real Estate and MRP Group.

Notice to Investors

This announcement is for information purposes only and does not constitute an offer or an invitation to acquire or dispose of any securities or investment advice or an inducement to enter into investment activity. The information in the press release is not intended to be complete. The tender offer is only being made pursuant to the Offer to Purchase. Holders of Terrafina certificates should read carefully the Offer to Purchase and accompanying documentation because they contain important information, including the terms and conditions of the tender offer.

This press release and any other document related to the tender offer may not be distributed, published, delivered and/or disseminated in any country where delivery and use would be contrary to applicable law. We have not authorized this press release or any other document related to the tender offer to be published, delivered, distributed and/or disseminated by third parties outside of Mexico or the United States. Therefore, recipients may not publish, distribute and/or disseminate this press release or any other document related to the tender offer outside of Mexico or the United States, unless in accordance with the applicable law.

Forward-Looking Statements

Certain statements in this press release may be considered “forward-looking statements.” Forward-looking statements are not guarantees of future performance. Any forward-looking statements contained herein are based on current expectations and assumptions. Forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control. We do not undertake, or assume any obligation, to provide updates of or to revise any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240610202864/en/

Media:



Blackstone:

Jeffrey Kauth

Jeffrey.Kauth@Blackstone.com

MRP:

Andrea González Chacón

agonzalezch@mrp.com.mx

Source: Blackstone and MRP Group

FAQ

What is the tender offer price for Terrafina certificates?

The tender offer price is Ps.38.50 per certificate.

What premium does the tender offer represent over the unaffected price on December 4, 2023?

The tender offer represents a 21% premium over the unaffected price on December 4, 2023.

Has the tender offer by Blackstone Real Estate and MRP Group been approved by COFECE?

Yes, the tender offer has been unconditionally approved by COFECE.

Is the tender offer by Blackstone Real Estate and MRP Group subject to financing conditions?

No, the tender offer is not subject to any financing condition.

When does the tender offer for Terrafina certificates expire?

The tender offer expires on July 10, 2024, at 14:00 Mexico City time, unless extended.