Blackstone to spend $3.5 billion on buying a real estate company

Tricon Residential Inc (TSE: TCN) opened sharply up on Friday after Blackstone Inc (NYSE: BX) said it will buy the real estate company for about $3.5 billion.

Details of Tricon-Blackstone agreement

The all-cash agreement values each share of Tricon Residential at $11.25 (C$15.17).

Blackstone Real Estate Income Trust and Blackstone Real Estate Partners X have come together for the said deal. Gary Berman – the chief executive of Tricon said in a press release today:

We’re proud of significant and immediate value this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents.

The news arrives just days before Blackstone is scheduled to report its financial results for the fourth quarter. Consensus is for it to earn 99 cents a share versus $1.07 per share a year ago.

Tricon will become a private company

Blackstone expects its agreement with Tricon Residential to close in the second quarter of 2024 provided that it satisfies customary closing conditions including regulatory and shareholders’ approval.

Tricon will transition into a private company once this acquisition is complete, as per the press release on Friday. It will also suspend its quarterly dividend for as long as its deal with Blackstone is pending.

The Canadian firm will complete its “$1 billion development pipeline of new single-family rental homes” in the United States as well as “$2.5 billion of new apartments” in Canada under the ownership of Blackstone.

In November, Blackstone Inc bought Rover Group at a massive premium (find out more).