Blackstone ($BX) has reached an agreement to purchase Retail Opportunity Investments ($ROIC) in a significant $4 billion transaction, transforming the shopping-center owner into a private entity. The cash offer of $17.50 per share represents a notable premium of 34% over Retail Opportunity Investments' closing share price on July 29, the last trading day prior to speculation regarding a potential acquisition, the companies confirmed on Wednesday. In afternoon trading, shares of Blackstone increased by 4.5%, while those of the real estate investment trust rose by 4.7%. "We are pleased to reach this agreement with Blackstone, as it will provide significant and certain value to our stakeholders," stated Retail Opportunity Investments Chief Executive Stuart Tanz. As of September 30, Retail Opportunity Investments owned 93 shopping centers totaling about 10.5 million square feet, predominantly located in Los Angeles, Seattle, San Francisco, and Portland. Jacob Werner, co-head of Americas Acquisitions at Blackstone Real Estate, expressed, "This transaction reflects our strong conviction in necessity-based, grocery-anchored shopping centers in densely populated areas.
The sector is experiencing accelerating fundamentals, benefiting from nearly a decade of virtually no new construction, while the demand for brick-and-mortar grocery stores, restaurants, fitness centers, and other lifestyle retailers remains robust." This deal, which includes the assumption of the REIT's debt, is projected to close in the first quarter of 2025, pending approval from Retail Opportunity Investments' shareholders. In October, Retail Opportunity Investments indicated that third-quarter rental revenue increased to $82.4 million from $78.3 million the previous year, slightly exceeding the average analyst estimate on Capital IQ of $82.3 million.
However, funds from operations declined to $0.25 per share from $0.27, aligning with Wall Street's expectations. At the time, the REIT revised its full-year per-share FFO guidance down to a range of $1.03 to $1.05, compared to an earlier estimate of between $1.04 and $1.07. Stock Price: 177.00, Price Change: +7.38, Percentage Change: +4.35.