Singapore's GIC, Blue Owl agree to buy Store Capital for US$14b

Singapore's GIC, Blue Owl agree to buy Store Capital for US$14b
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(Sept 15): Singaporean sovereign wealth fund GIC Pte Ltd and Blue Owl Capital Inc’s Oak Street agreed to acquire Store Capital Corp, a real estate investment trust that counts Warren Buffett’s Berkshire Hathaway Inc as an investor, in an all-cash deal valued at about US$14 billion (RM63.5 billion). 

Under the terms of the deal, Store shareholders will receive US$32.25 per share in cash, a roughly 20% premium to the company’s closing price on Sept 14, according to a statement on Thursday (Sept 15). The agreement includes a 30-day period in which Store can seek better offers, and is expected to close in the first quarter. 

Shares in the company were up the most since April 2020, climbing more than 20% to US$32.28 at 9.45am in New York on Thursday. That helped narrow this year’s decline to 6.2%. 

“We are confident the company will continue its trajectory of accretive growth by meeting demand for long-term financing solutions from middle-market US companies,” said Adam Gallistel, the head of Americas real estate at GIC.

Store, led by chief executive officer Mary Fedewa, has investments in more than 3,000 properties across the US. The portfolio totalled US$11.4 billion at the end of June, and includes properties used by restaurants, health clubs and medical offices, as well as manufacturing facilities and auto dealerships.

The company specialises in single-tenant properties leased on a net basis, meaning the tenant is responsible for taxes, insurance, maintenance and other expenses ordinarily shouldered by landlords. Berkshire invested US$377 million for a 9.8% stake in 2017, and has since reduced its position.

While retailers have been able to pass on higher costs to consumers so far, inflation and economic uncertainty are weighing on the outlook for net-lease tenants, according to a recent report from Green Street.