| Ticker | Status | Jurisdiction | Filing Date | CP Start | CP End | CP Loss | Deadline |
|---|
| Ticker | Case Name | Status | CP Start | CP End | Deadline | Settlement Amt |
|---|
| Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
|---|
Blackstone Remains Committed to Tricon's Extensive Housing Development Platform, Including its Pipeline of $1 Billion of New Single-Family Homes in the U.S. and $2.5 Billion of New Apartments in Canada
Plans to Improve Quality of Existing U.S. Single-Family Homes through an Additional $1 Billion of Capital Projects
All financial and share price-related information is presented in U.S. dollars unless otherwise indicated.
Blackstone (NYSE:BX) and Tricon Residential Inc. (NYSE:TCN, TSX:TCN) ("Tricon" or the "Company") today announced that they have entered into an arrangement agreement (the "Arrangement Agreement") under which Blackstone Real Estate Partners X together with Blackstone Real Estate Income Trust, Inc. ("BREIT") will acquire all outstanding common shares of Tricon ("Common Shares") for $11.25 (approximately C$15.17) per Common Share in cash (the "Transaction"). The Transaction price represents a premium of 30% to Tricon's closing share price on the NYSE on January 18, 2024, the last trading day prior to the announcement of the Transaction, and a 42% premium to the volume weighted average share price on the NYSE over the previous 90 days, and equates to a $3.5 billion equity transaction value based on fully-diluted shares outstanding. BREIT will maintain its approximately 11% ownership stake post-closing.
Tricon provides quality rental homes and apartments in great neighborhoods, along with exceptional resident services through its tech-enabled operating platform and dedicated on-the-ground operating teams. Tricon serves communities in high-growth markets such as Atlanta, Charlotte, Dallas, Tampa and Phoenix as well as Toronto, Canada. In addition to managing a single-family rental housing portfolio, Tricon has a single-family rental development platform in the U.S. with approximately 2,500 houses under development, as well as numerous land development projects that can support the future development of nearly 21,000 single-family homes. The Company also has a Canadian multifamily development platform that is building approximately 5,500 market-rate and affordable multifamily rental apartments.
Under Blackstone's ownership, the Company plans to complete its $1 billion development pipeline of new single-family rental homes in the U.S. and $2.5 billion of new apartments in Canada (together with its existing joint venture partners). The Company will also continue to enhance the quality of existing single-family homes in the U.S. through an additional $1 billion of planned capital projects over the next several years.
"We are proud of the significant and immediate value that this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents. Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities," said Gary Berman, President & CEO of Tricon.
"Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together," said Nadeem Meghji, Global Co-Head of Blackstone Real Estate. "We are excited that our capital will propel Tricon's efforts to add much needed housing supply across the U.S. and in Toronto, Canada."
The announcement of the Transaction follows the unanimous recommendation of a committee (the "Special Committee") of independent members of Tricon's board of directors (the "Board"). The Board, after receiving the unanimous recommendation of the Special Committee and in consultation with its financial and legal advisors, has determined that the Transaction is in the best interests of Tricon and fair to Tricon shareholders (other than Blackstone and its affiliates) and recommends that Tricon shareholders vote in favor of the Transaction.
"Following a thoughtful and comprehensive process, the Special Committee and Board concluded that the transaction with Blackstone is in the best interests of Tricon and its shareholders, and that the transaction price represents compelling and certain value for Tricon's shares," said Peter Sacks, Chair of the Special Committee and Independent Lead Director of Tricon.
Transaction Details
The Transaction is structured as a statutory plan of arrangement under the Business Corporations Act (Ontario). Completion of the Transaction, which is expected to occur in the second quarter of this year, is subject to customary closing conditions, including court approval, the approval of Tricon shareholders (as further described below) and regulatory approval under the Canadian Competition Act and Investment Canada Act.
As part of the Transaction, Tricon has agreed that its regular quarterly dividend during the pendency of the Transaction will not be declared and the Company's dividend reinvestment plan will be suspended. If the Arrangement Agreement is terminated, Tricon intends to resume declaring and paying regular quarterly distributions and reinstate the dividend reinvestment plan.
The Arrangement Agreement provides for, among other things, customary representations, warranties and covenants, including customary non-solicitation covenants from Tricon, subject to the ability of the Board to accept a superior proposal in certain circumstances, with a "right to match" in favour of Blackstone, and conditioned upon payment of a $122,750,000 termination fee to Blackstone, except that the termination fee will be reduced to $61,250,000 if the Arrangement Agreement is terminated by the Company prior to March 3, 2024 in order to enter into a definitive agreement providing for the implementation of a superior proposal. In certain circumstances, Blackstone is required to pay a $526,000,000 reverse termination fee to Tricon upon the termination of the Arrangement Agreement.
Completion of the Transaction will be subject to various closing conditions, including the approval of at least (i) two-thirds (66 2/3%) of the votes cast by shareholders present in person or represented by proxy at the special meeting of shareholders to be called to approve the Transaction (the "Special Meeting"), voting as a single class (each holder of Common Shares being entitled to one vote per Common Share) and (ii) the majority of the holders of Common Shares present in person or represented by proxy at the Special Meeting, excluding the votes of Blackstone and its affiliates, and any other shareholders whose votes are required to be excluded for the purposes of "minority approval" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") in the context of a "business combination" as defined thereunder. Further details regarding the applicable voting requirements will be contained in a management information circular to be filed with applicable regulatory authorities and mailed to Tricon shareholders in connection with the Special Meeting to approve the Transaction.
