Blackstone to take Tricon Residential private for $3.5 billion

(Reuters) – Investment management company Blackstone has agreed to take Canadian real estate firm Tricon Residential private for $3.5 billion, the companies said on Friday.

U.S.-listed shares of Tricon jumped about 28% at market open, hitting nearly a one-and-a-half-year high.

Under the deal, Blackstone will acquire all outstanding shares of Tricon for $11.25 per share in cash, representing a 30.35% premium to the stock’s last close.

Tricon primarily provides single-family rental housing and rental development in the United States and Canada.

After the acquisition, Tricon plans to complete its $1 billion development pipeline of new single-family rental homes in the U.S. and $2.5 billion of new apartments in Canada.

The transaction, expected to close in the second quarter of this year, comes at a time when Canada is facing an affordable housing crisis.

In a bid to boost supply, the Canadian government said last year it would remove the federal 5% consumption tax on the construction of new rental apartment buildings.

Morgan Stanley and RBC Capital Markets are the financial advisers to Tricon.

(Reporting by Aishwarya Jain in Bengaluru; Editing by Krishna Chandra Eluri and Shilpi Majumdar)