Blackstone Real Estate and MRP Group Increase Price of All-Cash Tender Offer for Terrafina

Rhea-AI Summary

Blackstone Real Estate and MRP Group have increased their all-cash tender offer for Terrafina real estate trust certificates to Ps.39.50 per certificate, up by Ps.1.00 from the initial offer. This offer represents a 24% premium over Terrafina's price on December 4, 2023, and an 8% premium over its price on June 7, 2024. The offer is the only all-cash tender offer available, providing immediate, substantial value with no tax consequences associated with exchange offers. The Comisión Federal de Competencia Económica (COFECE) has approved the offer unconditionally. The tender offer is valid until July 17, 2024, with a settlement date expected on July 24, 2024. Completion is contingent on acceptance by holders of at least 50% plus one of the outstanding Terrafina certificates.

Positive

• All-cash offer increased to Ps.39.50 per Terrafina certificate.
• Represents a 24% premium over Terrafina's price on December 4, 2023.
• Represents an 8% premium over Terrafina's price on June 7, 2024.
• Provides immediate and substantial value to shareholders.
• No potential negative tax consequences compared to exchange offers.
• Offer approved unconditionally by COFECE.
• No financing condition required for the offer.
• Not contingent on additional board or shareholder approvals.

Negative

• Tender offer is contingent on acceptance by holders of at least 50% plus one of the outstanding Terrafina certificates.
• Settlement date may be delayed if the expiration date is extended.

Financial Analyst

Blackstone Real Estate and MRP Group's decision to increase their all-cash tender offer for Terrafina's real estate trust certificates to Ps.39.50 per certificate introduces a notable premium of 24% over the unaffected price and 8% over the most recent closing share price. This move signifies a strong commitment from Blackstone and MRP to secure a controlling interest in Terrafina.

For shareholders, this offer presents a highly attractive and immediate financial gain, providing liquidity without the complexities of potential tax consequences typically associated with non-cash exchange offers. The certainty of this cash offer, backed by Blackstone’s proven track-record of over 50 successful public transactions and the unconditional approval from the Mexican antitrust authority, COFECE, adds further appeal.

However, investors should weigh the short-term benefits of immediate cash against the long-term potential of holding onto Terrafina certificates. The certainty and premium of this offer might appeal more to those looking for immediate returns rather than long-term investments.

Market Research Analyst

The real estate market in Mexico has been experiencing growth and stabilization, which makes Terrafina an attractive investment target for entities like Blackstone and MRP. Blackstone leveraging its expertise and solid history in public company transactions further solidifies investor confidence in the transaction's success.

Market conditions indicate that this offer might set a precedent for future acquisitions in the region, potentially increasing the perceived value of other real estate investments. From a competitive standpoint, the lack of competing bids underscores the strategic value this tender offer might have for current shareholders.

Given the absence of additional board or shareholder approvals and the straightforward tender process, the market response is likely to be positive, bringing capital appreciation opportunities for those invested in similar assets.

Legal Expert

The legal framework surrounding this tender offer appears robust, with significant attention paid to ensuring compliance with Mexican regulations, as evidenced by the unconditional approval from COFECE. The absence of financing conditions and minimal closing conditions reduce the potential for legal complications, enhancing the attractiveness of the offer.

For shareholders, the provision of clear terms and conditions, along with a straightforward tendering process, minimizes legal risks and uncertainties. It also highlights Blackstone and MRP's commitment to transparency and adherence to regulatory requirements, which can boost investor confidence in the legitimacy and finality of the transaction.

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 increased the price of its tender offer for up to 100% of the outstanding real estate trust certificates of Terrafina (BMV:TERRA 13) by Ps.1.00 per certificate to a purchase price of Ps.39.50 per certificate.

The all-cash tender offer represents a premium of 24% over the unaffected price per Terrafina certificate at the close of trading on December 4, 2023 and an 8% 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 17, 2024, unless the expiration date is extended in accordance with the Offer to Purchase referred to below. The settlement date is expected to be July 24, 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).

These changes to the terms of the tender offer do not result in withdrawal rights.

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 $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 and the Supplemental Notice (Aviso de Oferta) are available free of charge in English at the following links:

• https://www.cibanco.com/DOC/ESTADOSFINANCIEROS/2.%20Tesoro%20-%20Folleto%20Informativo%20(Ingl%C3%A9s).pdf; and
• 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/20240618407045/en/

Media Contacts

Blackstone:

Jeffrey Kauth

Jeffrey.Kauth@Blackstone.com

MRP:

Andrea González Chacón

agonzalezch@mrp.com.mx

Source: Blackstone Real Estate

FAQ

What is the new tender offer price for Terrafina certificates?

The new tender offer price is Ps.39.50 per Terrafina certificate.

What is the premium of the new offer over Terrafina's December 4, 2023 price?

The new offer represents a 24% premium over Terrafina's price on December 4, 2023.

When is the expiration date for the tender offer for Terrafina certificates?

The expiration date for the tender offer is July 17, 2024.

What is the settlement date for the tender offer for Terrafina certificates?

The settlement date is expected to be July 24, 2024.

What are the conditions for the completion of the tender offer?

The offer must be accepted by holders representing at least 50% plus one of the outstanding Terrafina certificates.

Has the tender offer been approved by the Mexican antitrust authority?

Yes, the tender offer has been unconditionally approved by the Comisión Federal de Competencia Económica (COFECE).