Valad board backs Blackstone's takeover bid

US private equity firm Blackstone has agreed to acquire Australia's Valad Property Group in a deal which values the company at A$208 mln (EUR 152 mln). In a statement on Friday, Valad said it has been offered A$1.80 in cash per security, representing a premium of 56% over the closing price on April 27, the last trading day prior to the announcement.

The offer price is at a 22% discount to the group's net tangible assets.

According to a report in The Australian newspaper, the deal also envisages the assumption by Blackstone of around A$600 mln in debt.

Sydney-based Valad said its directors unanimously recommend the deal 'in the absence of a superior proposal and subject to an independent expert's opinion' that it is in the best interests of the Valad securityholders.

'The Valad Board has been considering a range of strategic options to maximise securityholder value, including maintaining the status quo, a recapitalisation via an equity raising, a series of select asset sales and an orderly wind-up,' said Valad Chairman, Trevor Gerber. 'After receipt and assessment of the Blackstone proposal, the Valad Board considers that it provides the most certain value proposition for all Valad securityholders.'

The transaction, which is planned to close in late July, would represent Blackstone's second deal with an Australian property company this year after the group paid $9.4 bn (EUR 6 bn) to Melbourne-based Centro Properties Group for a large portfolio of US shopping centres. The operation is dependant upon approval by the securityholders and a number of other conditions.

The acquisition gives Blackstone ownership of office buildings and retail properties well as funds managing A$8 bn in assets across Australia, New Zealand and Europe. Valad's European investment management business encompasses 15 funds with EUR 5 bn in assets at year-end 2010.