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A $3.5 Billion Buyout Deal by Blackstone Boosts Tricon's Stock by 28%

January 19, 2024
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Blackstone Inc.'s announcement of its intention to acquire Tricon Residential Inc., a Canadian real estate investment company, sent shockwaves through the stock market, causing Tricon's stock to surge by an impressive 28% on Friday. The move by Blackstone, a global powerhouse in the investment and real estate sectors, marks a significant development in the landscape of property investment.

Tricon Residential Inc.'s stock, listed on the New York Stock Exchange under the ticker symbol TCN, experienced a remarkable uptick of $2.46 per share, reaching $11.08 during Friday morning trading. This surge was a direct response to Blackstone's declaration that its Blackstone Real Estate Partners X real estate fund and Blackstone Real Estate Income Trust Inc. would undertake the acquisition, intending to privatize Tricon for a substantial $3.5 billion.

Under the proposed deal, all outstanding common shares of Tricon will be purchased at a cash price of $11.25 per share, which is equivalent to C$15.17. This offer represents a generous 30% premium over Tricon's closing share price on the preceding Thursday, a considerable boon for the company's shareholders. Notably, Blackstone's Real Estate Income Trust Inc. will retain approximately 11% ownership stake even after the closing of the transaction, reinforcing Blackstone's ongoing interest and commitment to the real estate sector.

Tricon Homes, known for its specialization in rental homes and apartments in key cities such as Toronto, Atlanta, Dallas, Tampa, Phoenix, and Charlotte, N.C., remains undeterred in its ambitious plans for expansion. The company is actively involved in the development of approximately 2,500 new houses in the United States, along with ongoing land development projects that aim to bring an additional 21,000 single-family homes to fruition. In addition to its U.S. ventures, Tricon is currently engaged in the construction of 5,500 multifamily rental units in Canada.

One of the key assurances provided by Tricon is that, even under Blackstone's ownership, its substantial investment plans remain intact. The company has earmarked a staggering $4.5 billion for various construction projects, underscoring its commitment to meeting the increasing demand for housing across different markets.

Nadeem Meghji, the global co-head of Blackstone Real Estate, expressed enthusiasm about the acquisition in a statement, noting that Blackstone is excited about leveraging its capital to support Tricon's efforts in addressing the critical need for housing supply in the United States and Toronto. This strategic alignment between Blackstone's financial resources and Tricon's ambitious projects creates a synergy that is poised to have a profound impact on the real estate landscape.

As the acquisition progresses, industry observers and stakeholders will be keenly watching to see how this union between Blackstone and Tricon unfolds. The collaboration has the potential to reshape the dynamics of the real estate market, not only by infusing significant capital but also by combining the expertise and strengths of two prominent entities in the field. The increased focus on housing supply, both in the U.S. and Canada, could have far-reaching implications for the real estate sector, positioning Blackstone and Tricon as key players in shaping the future of residential development.

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Valentyna Semerenko
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