Blackstone to Acquire Excel Trust Shares

SAN DIEGO—Excel Trust Inc., a retail-focused REIT that primarily targets community shopping centers, power shopping centers and grocery-anchored neighborhood centers, has entered into a definitive agreement with Blackstone Property Partners L.P. under which Blackstone will acquire all outstanding shares of common stock of Excel Trust for $15.85 per share in an all-cash transaction valued at approximately $2 billion. The announcement comes on the heels of the firm's announcement Friday morning that GE has agreed to sell the bulk of its GE Capital Real Estate platform to the Blackstone Groupand Wells Fargo in a deal worth about $23 billion.

In addition,as GlobeSt.com also reported Friday, the GE that emerges from the company's simplification process will derive more than 90% of its revenues from its high-return industrial businesses, including aircraft, healthcare and energy. At the peak of the last cycle, when GE's financial services and real estate holdings were at their peak, the industrial side represented less than half that percentage of the total.

The Excel transaction has been unanimously approved by Excel Trust's board of directors and represents a premium of nearly 15% over the company's closing stock price on April 9. In addition to the common stock dividend of $0.18 per share payable on April 15, Excel intends to pay an additional common stock dividend in July, but under the terms of the agreement, not for any quarter thereafter.

According to Gary Sabin, chairman and CEO of Excel, “Appetite for high-quality retail real estate is strong with cap rates and REIT stock multiples approaching historic levels, and we did not believe the market accurately reflected the value of the assets. This led the board to conclude it was time to more fully assess the value of our portfolio. After reviewing our options, we were pleased to have a group with Blackstone's reputation step forward with this offer.”

Excel declined to comment further to GlobeSt.com on the transaction.

Nadeem Meghji, co-head of US real estate acquisitions for Blackstone, says, “Excel is a terrific company with great long-term potential. This will be a milestone transaction for our core-plus real estate investment strategy.” Blackstone will be making the investment through BPP, its core-plus real estate investment unit, which targets substantially stabilized office, retail, industrial and multifamily assets located in primary US markets.

Completion of the transaction, which is expected to occur in the second half of 2015, is contingent upon customary closing conditions, including the approval of Excel Trust's stockholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by Blackstone.