Blackstone to acquire BioMed Realty Trust for $4.8 billion

Today’s participation was below recent totals, as fewer than 900M shares changed hands at the NYSE floor.

Shares in Biomed Realty gained 8.6% in premarket trading.

Biomed Realty Trust (NYSE:BMR): On Monday heightened volatility was witnessed in Biomed Realty Trust (NYSE:BMR) which led to swings in the share price.

Thursday announced a definitive agreement with affiliates of Blackstone Real Estate Partners VIII, for Blackstone to acquire all outstanding shares of common stock of BioMed for $23.75 per share in an all-cash transaction valued at $8 billion. Eastdil Secured Group of Wells Fargo, Citigroup, JPMorgan Chase and Bank of America advised Blackstone, while Simpson Thacher & Bartlett provided legal advice.

“We believe that the public markets are not adequately valuing our assets and proven business model”, BioMed Realty’s CEO Alan D. Gold said. The Organization focuses on strategically located properties featuring applications and operations critical to the day to day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology (IT) departments of Fortune 100 and financial services businesses. The New York-based firm, which is now the world’s largest real estate investor, said the fund’s initial investments included the Strategic Hotels deal and the purchase of significant real estate assets from General Electric Capital Corp.

BioMed Realty owns a collection of office buildings catering to life science and biotech tenants in what Nadeem Meghji, co-head of USA real estate acquisitions for Blackstone, called the “gateway markets” of Boston, Cambridge, Mass., San Francisco, San Diego and Seattle.

BioMed isn’t the only US equity REIT struggling with undervaluation because fear of rising interest rates has depressed share prices. WTI crude oil spiked 3.4% to $49.43/bbl, briefly topping $50 for the first time since July, as Russia’s military involvement in Syria brought a geopolitcal risk premium into the market.

The company’s clients are biotechnology and pharmaceutical companies, scientific research institutions, government agencies, and other entities in the life science industry. Blackstone fell 2 percent Thursday to $34.01. The stock has a market capitalization of $4.73 billion and a P/E ratio of 24.15.