Valad sale to Blackstone approved by shareholders

Shareholders in Sydney-based Valad Property Group have approved the A$806 million sale of the company to New York private equity and real estate firm, The Blackstone Group.

The Australian company said today that following a successful vote which saw 95 percent of its shareholders approve, its shares would be bought by affiliates of Blackstone Real Estate Advisors, Blackstone’s real estate division, for A$1.80 a share.

Blackstone’s offer was originally accepted at the end of April.

The deal reflects a premium of 52 percent on both the Australian Securities Exchange-listed firm’s one month and three month average share prices of A$1.15 a share. The acquisition does however reflect a 12.4 percent discount to its gross asset value as at 31 December.

An application will now be made to Australia’s courts for approval with a hearing scheduled for 11 August. An approval there would see the company delisted a day later and into the hands of Blackstone, which used A$208 million of equity from its $10.9 billion, 2008 Blackstone Real Estate Partners VI fund to acquire the company.

The acquisition marks Blackstone’s first significant real estate investment in Australia and sees the company take on a portfolio of predominantly secondary real estate in the country’s major cities where it is said to believe has significant value recovery potential following the start of the global financial crisis.

The acquisition will see Blackstone take control of an Australian real estate portfolio, predominantly made up of office and industrial properties, valued at approximately A$600 million, as well as a European real estate investment management business which managed A$6.4 billion of assets as of December 31, 2010.

In a presentation to shareholders, Valad said: “In essence, the Valad directors believe that the Blackstone proposal is the best alternative available to security holders and provides the most certain value proposition for security holders.”