Blackstone's Real Estate Power Move: Takes Tricon Residential Private

Blackstone Inc BX has agreed to buy all Tricon Residential Inc. TCN shares for $11.25, or about C$15.17 per common share in cash.

The companies entered an arrangement agreement that outlines that Blackstone Real Estate Partners X, in partnership with Blackstone Real Estate Income Trust, Inc. (BREIT), will acquire all of Tricon’s outstanding shares. 

The transaction price represents a premium of 30% to Tricon’s closing share price on the NYSE on January 18, 2024, and equates to a $3.5 billion equity transaction value based on fully diluted shares outstanding. Post-acquisition, BREIT will retain its 11% ownership in Tricon.

Tricon specializes in quality rental homes and apartments across high-growth areas like Atlanta, Charlotte, Dallas, Tampa, Phoenix, and Toronto. Leveraging a tech-enabled platform and local teams, it manages a vast single-family rental portfolio, with about 2,500 U.S. houses in development and land for 21,000 more. The company is also developing around 5,500 market-rate and affordable multifamily rental apartments in Canada.

Also Read: Blackstone’s Latest Partnership Shows This Real Estate Sector Is Still Red Hot

Under Blackstone ownership, Tricon aims to finish its $1 billion U.S. single-family home developments and $2.5 billion Canadian apartment projects while upgrading existing U.S. homes with $1 billion in planned capital projects.

As a part of the transaction, Tricon agreed to suspend its regular dividend and dividend reinvestment plan, with plans to resume if the agreement is terminated. The arrangement includes standard clauses, such as non-solicitation by Tricon and a ‘right to match’ for Blackstone, along with termination fees ($122.75 million or $61.25 million in specific cases for Tricon and $526 million for Blackstone under certain conditions).

Tricon will remain headquartered in Toronto, Ontario, and TCN common shares will no longer be listed on the NYSE or TSX.

Price Action: BX shares are trading higher by 0.15% at $117.26, and TCN is up by 28% at $11.05 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.