Glendale, California and New York – (work wire) – PS Business Parks, Inc. (NYSE: PSB) (“PSB” or the “Company”) and Blackstone (NYSE: BX) today that they have entered into a definitive agreement under which the affiliates of Blackstone Real Estate (“Blackstone”) will acquire all outstanding shares of the common stock of PSB in exchange 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% over the weighted average stock price over the last 60 days.
Under the terms of the agreement, which was unanimously approved by the PSB Board of Directors, Blackstone will acquire PSB’s portfolio of 27 million square feet of industrial, commercial, traditional office and multifamily real estate primarily located 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 shareholders and a testament to the incredible company and portfolio of high-quality assets that our team has built, acquired and enhanced over the years,” said Stephen W. Wilson, President and CEO of PSB.
David Levine, Co-Head of Acquisitions in the Americas for Blackstone Real Estate, added, “We are excited to add the 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 to PSB clients.”
Details of the transaction
The transaction is expected to close in the third quarter of 2022, subject to PSB shareholder approval and other usual closing conditions. The merger agreement includes a “go-shop” period that will expire 30 days from today on 25 May 2022, which allows PSB and its representatives to solicit and consider alternative acquisition proposals to acquire PSB. PSB has the right to terminate the Final Merger Agreement with Blackstone to enter into a superior offer, subject to payment of termination fees and certain other terms and conditions of the Final Merger Agreement. There can be no guarantee that this process will result in a superior proposition, and PSB does not intend to disclose developments regarding the go-shop process unless and until it determines that such disclosure is appropriate or otherwise required.
PSB’s three outstanding series of Preferred Stock, and associated Depository Shares, will remain suspended on their terms after closing. We currently intend to continue to hold the Depository Shares representing our preferred stock listed on the New York Stock Exchange with public reporting as long as there is at least $75 million in total liquidation value of the preferred stock outstanding.
Public Storage (NYSE:PSA), which owns approximately 25.9% of the outstanding shares of PSB common stock, has agreed to vote its shares in favor of the transaction, in accordance with the terms of the support agreement between Public Storage and the Company and a subsidiary of Blackstone, which will terminate the support agreement. automatically upon termination of the Merger Agreement, including in connection with the termination of the Merger Agreement by PSB to enter into a superior offer. The deal will also include the acquisition of Public Storage Partners Limited ownership interests in the PSB Operating Partnership at the same unit price of $187.50.
From the date of the Merger Agreement until closing of the Transaction, PSB may declare and pay a regular quarterly cash dividend to its common stock holders and to owners of operating partnership units, in the amount of up to $1.05 per share or unit, including a prorated distribution in respect of any stub period. In addition, 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 ending March 31, 2022, which was previously scheduled for May 3, 2022.
Consultants
Simpson Thacher & Bartlett LLP serves as legal counsel for Blackstone. JP Morgan Securities LLC acts as PSB’s principal financial advisor and has provided a fair opinion to the PSB Board of Directors regarding the transaction. Eastdil Secured acts as a real estate advisor to PSB and also acts as a joint financial advisor to PSB. Wachtell, Lipton, Rosen & Katz act as legal counsel for PSB.
Blackstone real estate
Blackstone is a leading global real estate investment company. Blackstone Real Estate was founded in 1991 and has $298 billion of invested capital under management. Blackstone is the world’s largest owner of commercial real estate, owning and operating assets in every geographic region and major sector, including logistics, residential, office, hospitality and retail. Our vulture funds seek to acquire unmanaged assets located around the world. Blackstone’s Core+ business invests in highly stable real estate assets globally, through both corporate strategies and strategies tailored to income-focused individual investors including Blackstone Real Estate Income Trust, Inc. (BREIT), an unlisted US REIT, and a European Blackstone return-oriented strategy. Blackstone Real Estate also operates one of the world’s leading real estate debt firms, providing comprehensive financing solutions across the capital structure and risk spectrum, including managing the Blackstone Mortgage Trust (NYSE: BXMT).
About PS Business Parks
PS Business Parks, Inc. , a subsidiary of the S&P MidCap 400, is a commercial real estate REIT that acquires, develops, owns and manages predominantly multi-tenant, flexible, industrial, low-rise suburban offices. Primarily located in key coastal markets, the 96 PS business parks serve approximately 4,900 tenants on 27 million square feet as of March 30, 2022. The portfolio also includes 800 residential units (including units in process). Additional information is available about PS Business Parks, Inc. 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 submit relevant materials to the US Securities and Exchange Commission (“SEC”), including the Company’s proxy statement in Schedule 14A (“Proxy Statement”). This press release is not a substitute for a proxy statement or any other document that the company may file with the Securities and Exchange Commission or send to its shareholders in connection with proposed transactions. Before making any voting decision, company stockholders are urged to read all relevant documents filed with the Securities and Exchange Commission, including the introductory statement, as they become available as they will contain important information about this document. Investors and securities holders will be able to obtain the documents (when available) free of charge at the SEC website, http://www.sec.gov. In addition, documents (when available) can be obtained free of charge by accessing the Investor Relations section of the Company’s website at https://ir.psbusinessparks.com or by contacting Company Investor Relations via email [email protected] .
Participants in the bid
The Company and its directors and executives may be deemed to be involved in soliciting proxies of common stock holders of the Company in connection with the proposed transaction. Information about the company’s directors and executives is set out in the proxy statement for the company’s 2022 annual meeting of shareholders, which was filed with the Securities and Exchange Commission 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 Securities and Exchange Commission on February 22, 2022 and in other documents the company has filed with the Securities and Exchange Commission. Other information relating to the participants in the proxy application and a description of their direct and indirect interests, through securities holdings or otherwise, will be included in the proxy statement and other relevant material that will be submitted to the Securities and Exchange Commission in connection with the proposed transaction when it becomes available. Investors should read the proxy statement carefully as 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 historical facts may be considered forward-looking statements. Without limiting the foregoing, the words “may,” “will,” “believe,” “expect,” “plan,” “expect,” “seek,” “estimate,” “intend,” and similar expressions are intended to define the future-see data. These forward-looking statements are based on current expectations, estimates, projections, beliefs and assumptions, and involve uncertainty that could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the statements and are not guaranteed to occur. There are a number of significant 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 result in the termination of a merger agreement between the Company and Blackstone’s subsidiaries ; Failure to obtain the approval of the Company’s shareholders for the proposed transaction or failure to meet any of the other conditions for the completion of the proposed transaction; Shareholder claims in connection with the proposed transaction, which may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, compensation and liability; The effect of the announcement of the proposed transaction on the Company’s ability to retain and hire key personnel and maintain relationships with its tenants, vendors and others with whom it does business, or on its overall operating and business results; Risks associated with disruption of management’s attention from continuing business operations due to the proposed transaction; The ability to meet expectations regarding the timing and completion of the proposed transaction; and costs, fees, expenses and significant transaction costs. There can be no assurance that the proposed transaction or any other transaction described above will in fact take place in the expected time frame, on the expected terms or at all. For further discussion of factors that could affect results, please refer to the risk factors set forth in Section 1A of the Company’s Annual Report on Form 10-K filed by the Company to the Securities and Exchange Commission on February 22, 2022, and subsequent filings by Company with SEC. In light of the significant uncertainties inherent in the forward-looking statements included here, the inclusion of such information should not be taken as a representation by us or anyone else that our objectives and plans will be achieved. Any forward-looking statement speaks only as of the date it is made. Further, we assume no obligation to update such 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 on these forward-looking statements. The company claims safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
