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 August 2, 2024. The offer of Ps.40.50 per certificate for up to 100% of outstanding certificates represents a 27% premium over the December 4, 2023 price and a 10% premium to the June 7, 2024 closing price. The offer requires acceptance by holders of at least 50% plus one of outstanding certificates.

Key points:

• Offer extended to August 2, 2024, at 14:00 Mexico City time
• Expected settlement date: August 9, 2024
• COFECE has unconditionally approved the tender offer
• No financing condition or additional approvals required

Positive

• All-cash tender offer provides immediate value for shareholders
• 27% premium over December 4, 2023 price and 10% premium to June 7, 2024 closing price
• Unconditional approval from Mexican antitrust authority (COFECE)
• No financing condition or additional approvals required
• Blackstone Real Estate'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 tender offer may indicate lower than expected initial acceptance

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 price of Ps.40.50 per certificate represents a substantial 27% premium over Terrafina's unaffected price on December 4, 2023 and a 10% premium to its closing price on June 7, 2024. This premium underscores the perceived value of Terrafina's assets and the strategic importance of this acquisition for Blackstone and MRP Group.

The extension to August 2, 2024, provides shareholders with additional time to consider the offer, which could potentially increase the likelihood of reaching the 50% plus one acceptance threshold required for the deal to proceed. The automatic extension mechanism for successive one-day periods if the threshold isn't met by the expiration date demonstrates the offerors' commitment to completing the transaction.

Importantly, the unconditional approval from COFECE, Mexico's antitrust authority, removes a significant regulatory hurdle. The absence of financing conditions and additional board or shareholder approvals further streamlines the process, potentially expediting the completion of the deal if the acceptance threshold is met.

For investors, the all-cash nature of the offer provides certainty and immediate liquidity, which is particularly attractive in the current economic climate. The avoidance of potential tax consequences associated with competing exchange offers adds another layer of appeal for shareholders considering their options.

However, investors should carefully weigh the immediate premium against Terrafina's long-term growth potential and the broader market conditions in Mexican real estate. The success of this tender offer could signal increased interest in Mexican REITs from international investors, potentially impacting valuations across the sector.

Real Estate Market Analyst

The extended tender offer for Terrafina by Blackstone Real Estate and MRP Group is a noteworthy event in the Mexican real estate market. Terrafina, with its portfolio of industrial properties, represents a significant foothold in Mexico's growing logistics and manufacturing sectors. Blackstone's interest underscores the potential they see in these market segments, likely driven by nearshoring trends and Mexico's strategic position in North American supply chains.

The Ps.40.50 per certificate offer price suggests a robust valuation of Mexican industrial real estate. This could have ripple effects across the market, potentially leading to revaluations of similar assets and increased investor interest in the sector. The premium offered might also set a new benchmark for future transactions in the Mexican REIT market.

It's worth noting that Blackstone's global expertise and capital resources could significantly enhance Terrafina's portfolio if the acquisition is successful. This could lead to improved asset management, potential expansion and possibly attract more multinational tenants, further solidifying the position of Mexican industrial real estate in global investment portfolios.

However, the market should also consider the potential concentration of ownership in the sector if this deal goes through. Blackstone's increased presence could influence market dynamics, potentially affecting smaller players and future pricing in the industrial real estate segment.

For the broader Mexican real estate market, this transaction, if successful, could signal increased confidence from international institutional investors. This might lead to more capital inflows, potentially benefiting the entire sector. However, it may also intensify competition for prime assets, possibly driving up prices in the industrial and logistics segments.

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 August 2, 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 August 2, 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 9, 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/20240801902219/en/

Blackstone:

Jeffrey Kauth

Jeffrey.Kauth@Blackstone.com



MRP:

Andrea González Chacón

agonzalezch@mrp.com.mx

Source: Blackstone Real Estate

FAQ

What is the new expiration date for Blackstone's tender offer for Terrafina (BMV:TERRA 13)?

The tender offer for Terrafina has been extended until August 2, 2024, at 14:00 Mexico City time.

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

Blackstone is offering Ps.40.50 per certificate for up to 100% of Terrafina's outstanding real estate trust certificates.

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

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

Has Blackstone's tender offer for Terrafina (BMV:TERRA 13) received regulatory approval?

Yes, the Mexican antitrust authority, COFECE, has unconditionally approved the tender offer.

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.