Blackstone Real Estate and MRP Group Announce Extension of 100% Cash Tender Offer for Terrafina

Rhea-AI Summary

Blackstone Real Estate and MRP Group have extended their all-cash tender offer for Terrafina (BMV:TERRA 13) until July 25, 2024. The offer of Ps.40.50 per certificate for up to 100% of outstanding certificates represents a 27% premium over the unaffected price on December 4, 2023, and a 10% premium to the closing price on June 7, 2024.

The offer requires acceptance by holders of at least 50% plus one of outstanding certificates. The Mexican antitrust authority (COFECE) has unconditionally approved the tender offer, which is not subject to financing conditions or additional approvals. The expected settlement date is August 1, 2024, unless extended.

Positive

• All-cash tender offer provides immediate value for Terrafina shareholders
• 27% premium over unaffected price on December 4, 2023
• 10% premium to closing share price on June 7, 2024
• Unconditional approval from Mexican antitrust authority (COFECE)
• No financing conditions or additional approvals required

Negative

• Offer requires acceptance by holders of at least 50% plus one of outstanding certificates

Insights

Financial Analyst

The extension of Blackstone Real Estate and MRP Group's all-cash tender offer for Terrafina is a significant development in the real estate investment trust (REIT) sector. The offer of Ps.40.50 per certificate, representing a 27% premium over the unaffected price, signals a strong valuation for Terrafina's assets.

Key points to consider:

• The all-cash nature of the offer provides certainty and immediate value for shareholders, contrasting with competing exchange offers that may have tax implications.
• The 10% premium to Terrafina's recent closing price indicates continued confidence in the deal despite market fluctuations.
• The unconditional approval from COFECE removes a significant regulatory hurdle, increasing the likelihood of the transaction's completion.
• The absence of financing conditions and additional approvals streamlines the process, potentially accelerating the timeline to closure.

However, the extension suggests that the initial tender period did not yield the required 50% plus one certificate acceptance threshold. This could indicate some hesitation among shareholders or the presence of competing offers. The automatic extension mechanism provides flexibility but also hints at potential challenges in reaching the acceptance threshold.

For investors, this extended offer period presents both an opportunity and a dilemma. The premium remains attractive, but the extension may signal underlying complexities in the transaction dynamics. Shareholders should closely monitor any competing offers and assess the long-term value proposition of remaining invested in Terrafina versus accepting the immediate cash offer.

Real Estate Market Analyst

The extended tender offer for Terrafina by Blackstone Real Estate and MRP Group underscores the ongoing consolidation trend in the industrial real estate sector, particularly in emerging markets like Mexico. This move reflects Blackstone's strategic expansion in Latin American real estate, leveraging Mexico's position in global supply chains.

Several factors make this deal noteworthy:

• The partnership with MRP Group, a local player, demonstrates the importance of market-specific expertise in navigating complex real estate landscapes.
• The Ps.40.50 per certificate offer price suggests confidence in the long-term value of Mexican industrial properties, despite short-term economic uncertainties.
• Blackstone's track record of over 50 successful public company transactions adds credibility to the offer and may influence shareholder decisions.

The extension of the offer period to July 25, 2024, provides a substantial window for market dynamics to evolve. This extended timeline could be a double-edged sword: it allows for more shareholders to participate but also opens the door for potential competing bids or changes in market conditions.

For the broader Mexican real estate market, this transaction could set a benchmark for valuations in the industrial sector. If successful, it may trigger a wave of similar consolidation moves, potentially leading to increased foreign investment in Mexican REITs. However, the outcome will largely depend on Terrafina shareholders' perception of the long-term growth prospects versus the immediate premium offered.

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 extended the offer period of its all-cash tender offer of Ps.40.50 per certificate for up to 100% of the outstanding real estate trust certificates of Terrafina (BMV:TERRA 13), until 14:00 (Mexico City time) on July 25, 2024, in accordance with the Offer to Purchase.

As the only announced all-cash tender offer, this transaction would provide substantial and immediate value for Terrafina’s shareholders and avoids the uncertainty regarding the potential tax consequences associated with competing exchange offers.

In accordance with the terms of the Offer to Purchase, if 50% plus one of the outstanding Terrafina certificates have not been validly tendered and accepted by the offer expiration date, and assuming that no material change is being made concurrently to the terms of the offering, the tender offer period is automatically extended for successive periods of one business day, unless the offeror provides notice that the automatic extension will not apply. This extension of the tender offer does not result in withdrawal rights.

Terrafina certificates may be tendered at any time until 14:00 Mexico City time, on July 25, 2024, unless the expiration date is extended in accordance with the Offer to Purchase referred to below. The settlement date is expected to be August 1, 2024, unless the expiration date is extended in accordance with the Offer to Purchase. 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 (including, for the avoidance of doubt, any approved but unissued Terrafina certificates).

The all-cash tender offer represents a premium of 27% over the unaffected price per Terrafina certificate at the close of trading on December 4, 2023 and a more than 10% premium to Terrafina’s closing share price on June 7, 2024.

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.

Complete terms and conditions of the tender offer are set forth in the Offer to Purchase as supplemented by the Supplemental Notice (Aviso de Oferta). 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 $336 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, data centers, residential, office and hospitality. 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). 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 and the Supplemental Notice (Aviso de Oferta) are available free of charge in English at the following link: https://www.cibanco.com/es/cibanco/busqueda-emisoras-fiduciario?stock=47&series=29&idArea=servicio-fiduciarios

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/20240724990363/en/

Blackstone:

Jeffrey Kauth

Jeffrey.Kauth@Blackstone.com



MRP:

Andrea González Chacón

agonzalezch@mrp.com.mx

Source: Blackstone

FAQ

What is the new expiration date for Blackstone's tender offer for Terrafina (BX)?

The tender offer for Terrafina (BMV:TERRA 13) has been extended until July 25, 2024, at 14:00 Mexico City time.

What is the price per certificate offered in Blackstone's tender offer for Terrafina (BX)?

Blackstone Real Estate and MRP Group are offering Ps.40.50 per certificate for up to 100% of Terrafina's outstanding real estate trust certificates.

What premium does Blackstone's tender offer represent for Terrafina (BX) shareholders?

The offer represents a 27% premium over Terrafina's unaffected price on December 4, 2023, and a 10% premium to the closing share price on June 7, 2024.

What is the minimum acceptance threshold for Blackstone's tender offer for Terrafina (BX)?

The tender offer requires acceptance by holders of at least 50% plus one of Terrafina's outstanding certificates for completion.

When is the expected settlement date for Blackstone's tender offer for Terrafina (BX)?

The expected settlement date for the tender offer is August 1, 2024, unless the expiration date is extended.