PS Business Parks, Inc. (NYSE:PSB) (“PSB” or the “Company”) and
Blackstone (NYSE:BX) today announced that they have entered into a
definitive agreement under which affiliates of Blackstone Real
Estate (“Blackstone”) will acquire all outstanding shares of common
stock of PSB for $187.50 per share in an all-cash transaction
valued at approximately $7.6 billion, including transaction
expenses. The purchase price represents a premium of approximately
15% to the volume weighted average share price over the last 60
days.
Under the terms of the agreement, which has been unanimously
approved by PSB’s Board of Directors, Blackstone will acquire PSB’s
27 million square foot portfolio of industrial, business park,
traditional office, and multifamily properties located primarily in
California, Miami, Texas and Northern Virginia.
“I am extremely proud of everything we have accomplished at PS
Business Parks. This transaction is an exceptional outcome for our
stockholders and a testament to the incredible company and
portfolio of high-quality assets our team has built, acquired and
enhanced over the years,” said Stephen W. Wilson, President and
Chief Executive Officer of PSB.
David Levine, Co-Head of Americas Acquisitions for Blackstone
Real Estate, added, “We are excited to add PS Business Parks’
business park, office and industrial assets to our portfolio and
look forward to leveraging our expertise to provide the best
possible service and experience for PSB’s customers.”
Transaction Details
The transaction is expected to close in the third quarter of
2022, subject to approval by PSB’s stockholders and other customary
closing conditions. The merger agreement includes a “go-shop”
period that will expire 30 days from today on May 25, 2022, which
permits PSB and its representatives to actively solicit and
consider alternative acquisition proposals to acquire PSB. PSB has
the right to terminate the definitive merger agreement with
Blackstone to enter into a superior proposal, subject to the
payment of a termination fee and certain other terms and conditions
of the definitive merger agreement. There can be no assurance that
this process will result in a superior proposal, and PSB does not
intend to disclose developments with respect to the go-shop process
unless and until it determines such disclosure is appropriate or is
otherwise required.
PSB’s three outstanding series of preferred stock, and
associated depositary shares, will remain outstanding in accordance
with their terms following the closing. We currently intend to
continue to have the depositary shares representing our preferred
stock listed on the NYSE with public reporting so long as there is
at least $75 million aggregate liquidation value of preferred stock
outstanding.
Public Storage (NYSE:PSA), which holds approximately 25.9% of
the outstanding shares of PSB common stock, has agreed to vote its
shares in favor of the transaction, subject to the terms of a
support agreement between Public Storage, the Company and an
affiliate of Blackstone, which support agreement will terminate
automatically upon the termination of the merger agreement,
including in connection with a termination of the merger agreement
by PSB to enter into a superior proposal. The transaction will also
include the acquisition of Public Storage’s limited partner equity
interests in PSB’s operating partnership at the same per unit price
of $187.50.
From the date of the merger agreement through the closing of the
transaction, PSB may declare and pay regular, quarterly cash
distributions to holders of its common stock and to holders of its
operating partnership’s units, in an amount of up to $1.05 per
share or unit, including a pro rata distribution in respect of any
stub period. Additionally, PSB is permitted to declare and pay
regular quarterly dividends on its shares of preferred stock.
As a result of today’s announcement, PSB does not expect to host
a conference call and webcast to discuss its financial results for
the quarter ended March 31, 2022, which had previously been
scheduled for May 3, 2022.
Advisors
Simpson Thacher & Bartlett LLP is serving as Blackstone’s
legal counsel. J.P. Morgan Securities LLC is acting as lead
financial advisor to PSB and provided a fairness opinion to the PSB
board of directors in connection with the transaction. Eastdil
Secured is acting as real estate advisor to PSB and is also acting
as a co-financial advisor to PSB. Wachtell, Lipton, Rosen &
Katz is serving as PSB’s legal advisor.
Blackstone Real Estate
Blackstone is a global leader in real estate investing.
Blackstone’s real estate business was founded in 1991 and has US
$298 billion of investor capital under management. Blackstone is
the largest owner of commercial real estate globally, owning and
operating assets across every major geography and sector, including
logistics, residential, office, hospitality and retail. Our
opportunistic funds seek to acquire undermanaged, well-located
assets across the world. Blackstone’s Core+ business invests in
substantially stabilized real estate assets globally, through both
institutional strategies and strategies tailored for income-focused
individual investors including Blackstone Real Estate Income Trust,
Inc. (BREIT), a U.S. non-listed REIT, and Blackstone’s European
yield-oriented strategy. Blackstone Real Estate also operates one
of the leading global real estate debt businesses, providing
comprehensive financing solutions across the capital structure and
risk spectrum, including management of Blackstone Mortgage Trust
(NYSE: BXMT).
About PS Business Parks
PS Business Parks, Inc., an S&P MidCap 400 company, is a
REIT that acquires, develops, owns, and operates commercial
properties, predominantly multi-tenant industrial, industrial-flex,
and low-rise suburban office space. Located primarily in major
coastal markets, PS Business Parks’ 96 properties serve
approximately 4,900 tenants in 27 million square feet of space as
of March 30, 2022. The portfolio also includes 800 residential
units (inclusive of units in-process). Additional information about
PS Business Parks, Inc. is available on the Company’s website,
which can be found at psbusinessparks.com.
Additional Information and Where to
Find It
In connection with the proposed transaction, the Company will
file relevant materials with the U.S. Securities and Exchange
Commission (the “SEC”), including the Company’s proxy statement on
Schedule 14A (the “Proxy Statement”). This press release is not a
substitute for the Proxy Statement or any other document that the
Company may file with the SEC or send to its stockholders in
connection with the proposed transactions. BEFORE MAKING ANY VOTING
DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY
STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain the documents (when
available) free of charge at the SEC’s website, http://www.sec.gov.
In addition, the documents (when available) may be obtained free of
charge by accessing the Investor Relations section of the Company’s
website at https://ir.psbusinessparks.com or by contacting the
Company’s Investor Relations by email at
info@psbusinessparks.com.
Participants in the
Solicitation
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
holders of Company common stock in respect of the proposed
transaction. Information about the directors and executive officers
of the Company is set forth in the proxy statement for the
Company’s 2022 annual meeting of stockholders, which was filed with
the SEC on March 25, 2022, in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2021, which was filed
with the SEC on February 22, 2022 and in other documents filed by
the Company with the SEC. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the Proxy Statement and other relevant
materials to be filed with the SEC in respect of the proposed
transaction when they become available. Investors should read the
Proxy Statement carefully when it becomes available before making
any voting or investment decisions.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. For this purpose, any statements
contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the
foregoing, the words “may,” “will,” “believes,” “anticipates,”
“plans,” “expects,” “seeks,” “estimates,” “intends” and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are based upon present
expectations, estimates and projections and beliefs of and
assumptions, involve uncertainty that could cause the actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements and are not guaranteed
to occur. There are a number of important factors that could have a
material adverse effect on our operations, future prospects and the
proposed transaction, including but not limited to: the occurrence
of any event, change or other circumstance that could give rise to
the termination of the merger agreement between the Company and
Blackstone’s affiliates; the failure to obtain the approval of the
Company’s stockholders of the proposed transaction or the failure
to satisfy any of the other conditions to the completion of the
proposed transaction; stockholder litigation in connection with the
proposed transaction, which may affect the timing or occurrence of
the proposed transaction or result in significant costs of defense,
indemnification and liability; the effect of the announcement of
the proposed transaction on the ability of the Company to retain
and hire key personnel and maintain relationships with its tenants,
vendors and others with whom it does business, or on its operating
results and businesses generally; risks associated with the
disruption of management’s attention from ongoing business
operations due to the proposed transaction; the ability to meet
expectations regarding the timing and completion of the proposed
transaction; and significant transaction costs, fees, expenses and
charges. There can be no assurance that the proposed transaction or
any other transaction described above will in fact be consummated
in the expected time frame, on the expected terms or at all. For
further discussion of the factors that could affect outcomes,
please refer to the risk factors set forth in Item 1A of the
Company’s Annual Report on Form 10-K filed by the Company with the
SEC on February 22, 2022, and subsequent filings by the Company
with the SEC. In light of the significant uncertainties inherent in
the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by us
or any other person that our objectives and plans will be achieved.
Any forward-looking statement speaks only as of the date on which
it is made. Moreover, we assume no obligation to update these
forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such
forward-looking statements, except as required by law. Investors
should not place undue reliance upon these forward-looking
statements. The Company claims the safe harbor protection for
forward looking statements contained in the Private Securities
Litigation Reform Act of 1995.
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version on businesswire.com: https://www.businesswire.com/news/home/20220424005123/en/
Blackstone Jillian Kary (212) 583-5379
PS Business Parks Adeel Khan (818) 244-8080, Ext 8975
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