Investment firm agrees £674m BCPT takeover deal
Private investment firm Starwood Capital Group has agreed a deal worth £673.5m to acquire Columbia Threadneedle’s Balanced Commercial Property Trust (BCPT).
The acquisition – which would be facilitated through holding company Starlight – would be completed at 96 pence per share.
Starwood said this acquisition price would represent a premium for shareholders of approximately 21.5% compared to the 79p closing price per share from 12 April, the last business day prior to BCPT’s offer period.
The £673.5m acquisition price represents a discount of approximately 8.7% to BCPT’s last reported net asset value per share of 105.1p as of 30 June.
On 15 April, BCPT’s board announced that it had commenced a strategic review to explore a number of options to enhance value for its shareholders. These included a revised strategy, a managed wind-down of the portfolio and the sale of its either all or part of its share capital and/or assets.
At the time, BCPT faced a number of challenges with a difficult economic and property market backdrop in a higher interest rate environment. In the 12 months prior to the commencement of the strategic review, the group’s shares had been trading at an average discount to net asset value of 36.3%.
Starwood’s reasons for the proposed acquisition include BCPT’s “high-quality, attractive and diversified” real estate portfolio, and its view that the full potential of the business is best achieved as a private company under its control.
Paul Marcuse, chair of BCPT, said: “Over the course of the strategic review, we have undertaken an open consultation process with shareholders and the BCPT Board is grateful for the constructive feedback. We note that a significant proportion of the share register expressed to us a clear preference for a liquidity event, either via a sale or a managed wind-down.
“The BCPT board has explored a range of potential options for the company, including continuation with a revised strategy, a managed wind-down of the portfolio and the partial or full sale of BCPT’s share capital or assets. The BCPT Board is pleased with the interest shown in the company and its portfolio by various credible third parties during the strategic review, which represented a range of sources of capital (including UK institutional capital, private equity investors, listed real estate peers and asset managers). The BCPT Board has carefully considered each of the company’s strategic options, benchmarked against the likely returns that could be achieved in a managed wind-down.
“Following careful consideration, and having taken independent third-party advice, we believe that the proposed transaction with Starwood offers a successful outcome for our shareholders, offering a full cash exit at a significant premium to BCPT’s undisturbed share price. We, the BCPT board, therefore intend to recommend unanimously that BCPT shareholders support the acquisition at the court meeting and the general meeting, details of which will follow in due course.”
Matthew Parrott, managing director of Starwood, added: “We are pleased to announce the acquisition of Balanced Commercial Property Trust Limited and to provide BCPT’s shareholders with a significant premium to the undisturbed share price. This acquisition by controlled affiliates of the Starwood Capital Group will increase our exposure to logistics and other high-conviction sectors and we look forward to supporting BCPT through our access to capital, scale, and operational expertise.”
BCPT invests principally in three commercial property sectors: office, retail (including retail warehouses) and industrial. It also has an exposure to other commercial property sectors such as healthcare, leisure, hotels and serviced apartments, residential property, student housing, car parks and petrol stations, storage, and supermarkets.
Starwood Capital Group is a private investment firm with a core focus on global real estate, energy infrastructure and oil & gas. The group currently has over $115bn (£87.4bn) of assets under management.