Real Estate Investment Firm Kennedy Wilson To Go Private In $1.6B Deal
Investment firm Kennedy Wilson reached a deal to go private at a roughly $1.6B valuation, becoming the latest public real estate company to be picked off the market by private capital in a string of M&A activity.
A consortium including Fairfax Financial Holdings, a Canadian holding company and insurer, agreed to pay $10.90 per share in cash to buy out shareholders in Beverly Hills-based Kennedy Wilson, the companies announced Tuesday.
Kennedy Wilson CEO William McMorrow and other senior executives at the firm are among the group of buyers, and McMorrow will continue to lead the company following the acquisition. The purchasing consortium is called KW Management Group.
The purchase price is a 46% premium on Kennedy Wilson’s stock price on Nov. 4, the day before the firm disclosed the buyout offer from Fairfax and the executive team. The initial offer promised shareholders’ $10.25 per share.
Kennedy Wilson’s stock jumped nearly 10% on the opening bell Tuesday to just under the acquisition price. Shares jumped above $9 after the initial buyout offer and stayed around that range before Tuesday’s announcement.
A special committee of independent directors formed after the offer was made unanimously recommended its approval, and the deal has been cleared by the Kennedy Wilson board of directors.
The transaction is expected to close during the second quarter, pending a shareholder vote, and the merger agreement allows Kennedy Wilson to distribute a 12-cent dividend for up to two more quarters before the company goes private.
The buyers said in November that Kennedy Wilson could unlock cost savings by eliminating administrative and regulatory burdens associated with being publicly listed.
Kennedy Wilson has $31B in assets under management in the U.S., UK and Ireland. The firm owned 40,872 multifamily units, 94% of which are in the U.S., at the end of September, according to its third-quarter reporting. It owned 119 industrial assets, had 46 properties in its office portfolio, and grew its debt portfolio to $10.5B.
The investment firm reported a $21M loss in third-quarter results posted on Nov. 11, an improvement from the $77M loss during the same period a year prior.
“We continued to execute on our strategic initiatives in the third quarter, highlighted by growth in our Fee-Bearing Capital to $9.7 billion and strong progress on our 2025 disposition plan, which has generated approximately $470 million in cash in 2025 and exceeded our target of $400 million,” McMorrow said in a statement at the time.
Perceived discounts in public valuations are fueling M&A activity. This month alone, a Japanese logging company made a $4.5B deal to buy U.S. homebuilder Tri Pointe Homes, and Brookfield Asset Management agreed to spend $1.2B on an industrial outdoor storage REIT.
