- GIC and Oak Street announced they are buying STORE Capital (STOR) for $14 billion. This is why.
STORE Capital Corporation (STOR) and GIC (a global institutional investor in partnership with Oak Street, a Division of Blue Owl, one of the largest net lease investors) announced that they have 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 $14 billion.
Merger agreement terms: 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/Approval: The deal, 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. And after that, the company has agreed to suspend the payment of any further regular quarterly dividends through the closing.
KEY QUOTES:
“This all-cash transaction delivers a meaningful premium that provides immediate and certain value for our stockholders in a challenging market environment while positioning the company, its customers, and its partners for continued success. I would like to extend my thanks to the entire Board and management team for their hard work during this process, and for their unwavering commitment to acting in the best interests of our stockholders.”
— Tawn Kelly, Chairman of the Board of Directors of STORE Capital
“We are pleased to partner with GIC and Oak Street to deliver what we believe is an excellent outcome for our stockholders. This opportunity is an endorsement, by two leading real estate investors with significant access to capital, of the strength of our platform, our experienced leadership team, and our disciplined investment approach. We look forward to continuing to grow and support our customers.”
— Mary Fedewa, President and Chief Executive Officer of STORE Capital
“As one of the largest dedicated U.S. net lease real estate companies in a nearly US$4 trillion-dollar market, STORE Capital is a strong addition to GIC’s diverse portfolio of U.S. real estate investments. We are confident the Company will continue its trajectory of accretive growth by meeting the demand for long-term financing solutions from middle-market U.S. companies. We look forward to working closely with STORE Capital and our partners at Oak Street to grow this platform over the long term.”
— Adam Gallistel, Head of Americas Real Estate, GIC
“As a global long-term investor, GIC seeks to invest in best-in-class businesses with strong long-term growth potential. We are thrilled to lead this investment in STORE Capital given its impressive cash flow profile, long-weighted average lease term, and highly diversified portfolio with strong rent coverage.”
— Lee Kok Sun, Chief Investment Officer of Real Estate, GIC
“We are extremely excited to invest together with a like-minded and thoughtful partner in GIC. We believe the STORE Capital platform complements Oak Street’s exposure to the triple-net industry and our focus on sale-leasebacks. The potential scale of this combination and partnership can deliver one of the most diversified, unique, and long-dated net lease platforms across the globe.”
— Marc Zahr, President of Oak Street
