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GIC and Oak Street, a division of Blue Owl, plan to acquire the REIT Store Capital Corp. for about $14B in an all-cash transaction.
The investors will pay Store Capital stockholders $32.25 per share, which represents a premium of more than 20% above the company’s closing stock price on Wednesday.
Store Capital is a publicly traded REIT that specializes in net-lease properties, with investments in more than 3,000 properties in the United States.
GIC is the sovereign wealth fund of Singapore, one of the top 10 such funds in the world, with about $690B in assets under management. Oak Street specializes in net-lease properties and currently has $16.6B in assets under management.
The deal, which isn't subject to any financing considerations, is expected to close during the first quarter of 2023. The buyers did not specify how much each is contributing to the acquisition price.
The acquisition is the latest in the trend toward the privatization of public REITs by various investment giants, as stocks have dropped and the investors have billions in cash burning holes in their pockets. REITs make a good investment target, since they can be acquired at a relative discount to the value of their portfolios.
Store Capital shares traded for just north of $40 a share before the pandemic, suffering a sharp decline in 2020. Most of this year, the REIT has traded below $30 a share.
Between the beginning of 2018 and mid-2022, there were 20 take-private deals among REITs totaling $86B in value, according to a report JLL released in July. A large chunk of that, some $22B, has come from BREIT, Blackstone’s nontraded REIT vehicle.
Mergers and acquisitions are an efficient way to deploy capital, and the trend may continue if fundraising stays on track, new players raise significant capital and the prolonged dislocation in public and private market continues, said Sheheryar Hafeez, managing director of the M&A and Corporate Advisory Group within JLL Capital Markets.
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