Blackstone Group, the world’s largest private equity firm, is set to buy property and construction group Tysan Holdings for HK$2.5 billion ($322.6 million), according to a stock exchange filing.
The US group’s real estate business is one of the largest property investment managers in the world.
It has already made investments in Shanghai, Dalian, Nantong and Wuhan according to the filing. In one deal Blackstone bought Shanghai’s Huamin Imperial Tower, which has 50,000 square meters of office space.
Stephen Schwarzman, Blackstone’s chairman and chief executive, said in Hong Kong last October that China’s economic slowdown was creating opportunities to invest. Other executives at the US-based firm said one area would be property development firms.
Tysan has been listed in Hong Kong since 1991. Blackstone is offering HK$2.86 a share in cash and HK$1.40 for the cancellation of outstanding options to buyout any outstanding options granted in a company share option scheme.
Tysan’s shares were suspended on August 12; when they resumed trading they rose 6.5% to close at HK$2.77 a share on Monday.
Blackstone already has commitments to sell equal to about 60% of the company’s shares.
After completing the offer, Blackstone will review Tysan’s businesses and portfolio but at this stage plans to continue Tysan’s principal businesses.
In Hong Kong Tysan is engaged in building construction and engineering while in mainland China the company conducts property development, investment and management, according to its website.
The geographic diversity and range of assets in Tysan’s portfolio made Blackstone one of the few potential buyers of the company. A person familiar with the matter said that Blackstone has been in talks with Tysan for about a year.
The funds for the offer will partly come from Blackstone funds, including the multi-billion-dollar Blackstone Real Estate Partners Asia, which is still in fund-raising mode. One of the first purchases using the Asian fund was Greensborough Plaza, a retail mall in Melbourne for A$360 million.
Barclays advised Blackstone on the deal and is making the offer on the fund’s behalf.