Real estate funds managed by global private equity giant Blackstone have agreed a C$6.2 bn (€4.2 bn) deal for Dream Global REIT, the Europe-focused office and industrial investor headquartered in Canada.
Under the all-cash deal, Dream Global unitholders will receive C$16.79 per share, representing a premium of 18.5% to the closing price of Dream Global units as of September 13. The price also represents a 9.1% premium to Dream Global's June 30 EPRA net asset value (NAV).
'We are delighted to be acquiring Dream Global, a high-quality and diversified portfolio of office and logistics assets in Western Europe, which has been created by Dream over the last eight years,' said James Seppala, head of Blackstone Real Estate Europe.
'This transaction is an exciting opportunity for Blackstone to expand its existing office and logistics portfolios in some of the largest and most important markets in the region,' Seppala added.
In 2011, Canadian investor Dream created a public business to invest in European real estate, entering the market with the acquisition of a C$1 bn portfolio of 292 properties, consisting mostly of German post offices.
The portfolio was funded in part through the C$470 mln IPO of Dream Global, in which Dream invested C$120 mln. Since the IPO, Dream Global has sold over 200 of the original assets and positioned itself with a portfolio of core+ office assets in Germany, Austria, Belgium and the Netherlands, as well as light industrial and development.
'This transaction is the culmination of the tremendous growth that Dream Global has achieved since its 2011 IPO,' said Detlef Bierbaum, chairman of Dream Global's board of trustees.
'At a time when the Western European real estate market is becoming increasingly competitive, this transaction provides premium value to unitholders,' Bierbaum added.
Since inception, Dream Global will have generated a total return of 214% and investors will realise a total annualised return of 15%, upon closing of the transaction, according to the firm.
Members of Dream Global's board of trustees have unanimously approved the transaction, and recommend that unitholders vote in favour of the takeover.
'Today’s announcement can be attributed to Dream Global's high-quality portfolio of properties located in key markets in Western Europe and the strength of our property management platform, as evidenced by our strong relationships with tenants, partners and lenders,' said Jane Gavan, President and CEO of Dream Global.
'By combining a disciplined approach to capital allocation with active asset management, we have established Dream as one of the most respected brands for investing in Western European office properties,' Gavan added.
The transaction requires a consensus from 66.6% of Dream Global's unitholders, and if successful, is expected to close in December 2019.
TD Securities is acting as financial advisor to Dream Global, while Osler, Hoskin & Harcourt and Greenberg Traurig Germany are acting as legal counsel. National Bank Financial is acting as financial advisor to Dream's special committee, with Goodmans acting as legal counsel.
RBC Capital Markets, BNP Paribas, and Deutsche Bank Securities are acting as financial advisors to Blackstone, with Davies Ward Phillips & Vineberg and Simpson Thacher & Bartlett acting as legal counsel.