STORE Capital to be Acquired by GIC and Oak Street in $14 Billion Transaction
Posted on 09/15/2022
Increasingly sovereign wealth funds are seeing opportunities in real estate investment trusts. STORE Capital Corporation (NYSE: STOR) is an internally managed net-lease real estate investment trust (REIT) that invests in Single Tenant Operational Real Estate. Singapore’s GIC Private Limited (via GIC (Realty) Private Limited) and Chicago-based Oak Street Real Estate Capital, LLC, a unit of Blue Owl Capital, Inc., entered into a definitive agreement under which GIC and funds managed by Oak Street will acquire STORE Capital in an all-cash transaction valued at approximately US$ 14 billion. This is an all-cash transaction. GIC has been seeking out investments in the U.S. net lease real estate space. Oak Street Real Estate is a real estate investment firm focused on acquiring properties net-leased to investment grade and creditworthy tenants. Oak Street specializes in providing flexible capital solutions to a variety of organizations including corporations, healthcare systems, universities and government entities. Oak Street has $16.6 billion in assets under management as of June 30, 2022.
Under the terms of the definitive merger agreement, STORE Capital stockholders will receive $32.25 per share in cash, which represents a premium of 20.4% to STORE Capital’s closing stock price as of September 14, 2022 and a premium of 17.8% to the 90-day volume weighted average stock price through that date.
Timing and Approvals
The transaction, which was unanimously approved by the STORE Capital Board of Directors, is expected to close in the first quarter of 2023, subject to approval by STORE Capital’s stockholders and the satisfaction of certain other customary closing conditions. The closing of the transaction is not subject to any financing conditions.
The definitive merger agreement includes a 30-day “go-shop” period that will expire on October 15, 2022, which permits STORE Capital and its representatives to actively solicit and consider alternative acquisition proposals. There can be no assurance that this process will result in a superior proposal, and the Company does not intend to disclose developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required.
Under the terms of the definitive merger agreement, STORE Capital will declare and pay its third quarter cash dividend in the ordinary course. Thereafter, the Company has agreed to suspend payment of any further regular quarterly dividends through the closing. Subject to and upon completion of the transaction, STORE Capital’s common stock will no longer be listed on the New York Stock Exchange.
Column Financial, Inc. has committed to provide debt financing for the transaction in an aggregate principal amount equal to US$ 2.6 billion, on the terms and subject to the conditions set forth in a commitment letter, dated as of September 15, 2022.
Advisors
Evercore and Goldman Sachs & Co. LLC are acting as financial advisors to STORE Capital, and DLA Piper LLP (US) is acting as its legal counsel. Eastdil Secured Advisors LLC and Citigroup Global Markets Inc. are acting as financial advisors to GIC and Oak Street. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to GIC and Kirkland & Ellis LLP is acting as legal counsel to Oak Street.