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Why is Blackstone (BX) Planning to Acquire Officefirst?
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The Blackstone Group L.P. (BX - Free Report) is planning to acquire German real estate group, Officefirst, in a probable €3 billion ($3.6 billion) deal, according to three sources familiar with the matter. This was reported by Reuters.
The property group IVG Immobilien AG, is slated to auction Officefirst, which comprises a portfolio of 100 German office buildings, including the landmark Squaire at Frankfurt airport.
Notably, other firms including Alstria Office Reit-AG and Patrizia Immobilien AG were earlier interested in acquiring Officefirst, but are no longer interested in the deal.
Why Officefirst?
Blackstone is eyeing the deal as a number of investors are competing for German property exposure. Also, these portfolios guarantee comparatively higher yields in the current low interest rate environment. Further, such multi-billion euro portfolios rarely come into the market for sale.
Moreover, private equity groups like Blackstone prefer investing in companies with higher debt levels. The current enterprise value of Officefirst stands at €3.25 billion, including €1.25 billion worth of equity and €2 billion of debt, since a revaluation of its properties in late 2015.
Sale VS Initial Public Offering (IPO)
IVG Immobilien is considering the sale of Officefirst along with a possibility of listing the unit. The company and its hedge fund owners expect to earn a high price for the real estate group in the country’s booming property market.
An outright sale would allow IVG Immobilien to divest the entire company immediately. An IPO, however, would result in an initial sale of only half of the Officefirst’s shares, with the remaining to be sold in the subsequent offerings. Further, in a potential IPO, Officefirst’s equity is projected to be valued at approximately €1.5 billion, with shares worth €700–€900 million placed with the investors.
Notably, IVG Immobilien is anticipated to decide the course of action to execute the sale around mid-September.
Currently, Blackstone carries a Zacks Rank #3 (Hold).
Other Stocks That Warrant a Look
Some better-ranked investment managers include Virtus Investment Partners, Inc. (VRTS - Free Report) , sporting a Zacks Rank #1 (Strong Buy),Fifth Street Asset Management Inc. and Eaton Vance Corp. (EV - Free Report) , both holding a Zacks Rank #2 (Buy).
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Why is Blackstone (BX) Planning to Acquire Officefirst?
The Blackstone Group L.P. (BX - Free Report) is planning to acquire German real estate group, Officefirst, in a probable €3 billion ($3.6 billion) deal, according to three sources familiar with the matter. This was reported by Reuters.
The property group IVG Immobilien AG, is slated to auction Officefirst, which comprises a portfolio of 100 German office buildings, including the landmark Squaire at Frankfurt airport.
Notably, other firms including Alstria Office Reit-AG and Patrizia Immobilien AG were earlier interested in acquiring Officefirst, but are no longer interested in the deal.
Why Officefirst?
Blackstone is eyeing the deal as a number of investors are competing for German property exposure. Also, these portfolios guarantee comparatively higher yields in the current low interest rate environment. Further, such multi-billion euro portfolios rarely come into the market for sale.
Moreover, private equity groups like Blackstone prefer investing in companies with higher debt levels. The current enterprise value of Officefirst stands at €3.25 billion, including €1.25 billion worth of equity and €2 billion of debt, since a revaluation of its properties in late 2015.
Sale VS Initial Public Offering (IPO)
IVG Immobilien is considering the sale of Officefirst along with a possibility of listing the unit. The company and its hedge fund owners expect to earn a high price for the real estate group in the country’s booming property market.
An outright sale would allow IVG Immobilien to divest the entire company immediately. An IPO, however, would result in an initial sale of only half of the Officefirst’s shares, with the remaining to be sold in the subsequent offerings. Further, in a potential IPO, Officefirst’s equity is projected to be valued at approximately €1.5 billion, with shares worth €700–€900 million placed with the investors.
Notably, IVG Immobilien is anticipated to decide the course of action to execute the sale around mid-September.
Currently, Blackstone carries a Zacks Rank #3 (Hold).
Other Stocks That Warrant a Look
Some better-ranked investment managers include Virtus Investment Partners, Inc. (VRTS - Free Report) , sporting a Zacks Rank #1 (Strong Buy),Fifth Street Asset Management Inc. and Eaton Vance Corp. (EV - Free Report) , both holding a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>