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 29, 2024. The offer of Ps.40.50 per certificate 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. COFECE has unconditionally approved the tender offer, which is not subject to financing conditions or additional approvals. The expected settlement date is August 5, 2024, unless extended.

Positive

• All-cash tender offer provides immediate value for shareholders
• 27% premium over unaffected price and 10% premium to recent closing price
• Unconditional approval from Mexican antitrust authority (COFECE)
• No financing conditions or additional approvals required
• Blackstone's track record of over 50 successful public company transactions

Negative

• Offer requires acceptance by holders of at least 50% plus one of outstanding certificates
• Extension of offer period may indicate insufficient initial acceptance

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 represents a 27% premium over Terrafina's unaffected price on December 4, 2023 and more than 10% premium to its closing price on June 7, 2024. This substantial premium underscores the perceived value of Terrafina's portfolio and the strategic importance of this acquisition for Blackstone and MRP Group.

The extension to July 29, 2024, provides additional time for certificate holders to consider the offer, potentially increasing the likelihood of reaching the 50% plus one acceptance threshold required for the deal's completion. This move demonstrates Blackstone's commitment to the transaction and confidence in its ability to close the deal.

Importantly, the all-cash nature of the offer provides certainty and immediate value for Terrafina's shareholders, contrasting with competing exchange offers that may carry tax implications. This aspect could be particularly attractive to investors seeking liquidity or concerned about potential tax consequences.

The unconditional approval from COFECE (Comisión Federal de Competencia Económica) removes a significant regulatory hurdle, further de-risking the transaction. Additionally, the absence of financing conditions and the need for additional approvals streamlines the process, potentially expediting the deal's closure.

For investors, this extended offer period presents an opportunity to reassess their positions in light of current market conditions and Terrafina's prospects. The premium offered may be particularly appealing given the current economic uncertainties and potential headwinds in the real estate sector.

Real Estate Market Analyst

The extended tender offer for Terrafina by Blackstone Real Estate and MRP Group signals a strategic move in the Mexican industrial real estate market. Terrafina's portfolio, primarily consisting of industrial properties, is particularly attractive given the ongoing trend of nearshoring and the growing importance of Mexico in global supply chains.

The Ps.40.50 per certificate offer price suggests that Blackstone and MRP see significant untapped value in Terrafina's assets. This valuation could be driven by several factors:

• Potential for operational improvements and efficiency gains under new management
• Anticipated growth in demand for industrial real estate in key Mexican markets
• Synergies with Blackstone's existing portfolio and global real estate expertise

The involvement of Blackstone, with its track record of over 50 successful public company transactions, brings substantial expertise and resources to the table. This could lead to enhanced property management, strategic repositioning of assets and potentially accelerated growth for Terrafina's portfolio.

For the broader Mexican real estate market, this transaction could set a new benchmark for valuations, particularly in the industrial sector. It may also attract more international investment, potentially leading to increased liquidity and professionalization of the market.

However, investors should consider the potential risks, including:

• Integration challenges post-acquisition
• Possible changes in the Mexican economic or political landscape
• Global economic uncertainties that could impact demand for industrial real estate

Overall, this extended offer period provides a window for market participants to reassess the value of Mexican industrial real estate assets and potentially recalibrate their investment strategies in this sector.

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 29, 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 29, 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 5, 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/20240726745750/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 (BMV:TERRA 13)?

The tender offer for Terrafina (BMV:TERRA 13) has been extended until 14:00 (Mexico City time) on July 29, 2024.

How much is Blackstone offering per certificate in its tender offer for Terrafina (BMV:TERRA 13)?

Blackstone is offering Ps.40.50 per certificate in its all-cash tender offer for Terrafina (BMV:TERRA 13).

What premium does Blackstone's offer represent for Terrafina (BMV:TERRA 13) shareholders?

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

What is the minimum acceptance threshold for Blackstone's tender offer for Terrafina (BMV:TERRA 13)?

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