London/Frankfurt/Bremen/Wuppertal, March 12, 2007 — Under the terms of an agreement signed today, Blackstone Real Estate Partners (BREP/”Blackstone”) is to sell its majority shareholding in the Vitus Group, to a consortium of institutional investors including Morley Fund Management and Round Hill Capital for a total consideration of approximately €1.6 billion.
Blackstone is to retain a minority stake in the Vitus Group, and will continue to advise the holding company’s management on strategic issues, supporting efforts to enhance the value of the property portfolio and the future growth of the platform. Rent control and tenant protection rights, as well as other obligations above and beyond the relevant rent law provisions, will be unaffected by the transaction.
With more than 31,000 housing units, the Vitus Group was acquired by Blackstone in late 2004 from WCM. At that time, the Vitus Group consisted of several, separately financed and separately managed real estate companies. Today, the Vitus Group comprises five regional building societies with holdings in Bremen, Moenchengladbach, Kiel, Wuppertal and a number of other German Cities.
Since acquiring the residential real estate portfolio managed by the Vitus Group, Blackstone has implemented major value enhancement and restructuring measures as part of a wide-ranging asset management programme. These measures include the optimization of the financing structure of the residential property portfolio, the establishment of a enhanced group structure with streamlined back-office operations, a switch to a uniform IT solution, and the modernization of individual properties. Today’s agreement marks the first step towards a further broadening of the investor base at Vitus Group, a move designed to put in place a financial foundation for the further growth of the company.
Legal counsel to Blackstone Real Estate Partners was provided by Freshfields Bruckhaus Deringer and Simpson Thacher & Bartlett. The consortium was advised by Allen & Overy as legal counsel and by PricewaterhouseCoopers Transaction Services on financial due diligence and tax structure. Deutsche Bank Global Principal Finance acted as equity placement agent and financial advisor to the Consortium and as minority co-investor in the transaction.
The parties agreed not to disclose any further details of the transaction which is still subject to the approval of the antitrust and other authorities.
Notes to Editors
Blackstone Real Estate Partners
Blackstone Real Estate Partners forms a part of the Blackstone Group, one of the world’s leading investment and advisory companies. Since its establishment in 1985, the Blackstone Group has raised some $75 billion from investors for deployment in the private equity, real estate, corporate debt, and hedge funds sectors.
Blackstone Real Estate Partners is one of the world’s leading property market investors. Since it began operations in 1991, the firm has completed 181 real estate transactions, acquiring properties with an aggregate value of approximately $ 43 billion. In the European market, Blackstone has hitherto acquired real estate in France, the UK, Germany, Switzerland, Italy, Portugal, Luxembourg, Spain, the Netherlands, Austria, and Sweden. In Europe, Blackstone is one of the key investors in the commercial, hotel and residential real estate sectors.
Further information about Blackstone Real Estate Partners can be found at: www.blackstone.com
Morley Fund Management
Morley Fund Management Limited is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £165 billion (€246 billion) from offices around the world as at 31 December 2006. Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Aviva brand.
The property team manages in excess of £29 billion (€44 billion) of UK and European property assets, making Morley the largest property fund manager in Europe. The property team consists of 70 investment professionals and manages a range of funds on behalf of institutional, pension and retail clients. Morley has been at the forefront of innovation in property fund management and has launched eleven specialist sector based funds with partners, including: Igloo Regeneration Fund, Quercus Healthcare Property, The Junction and The Mall.
Further information about Morley Fund Management can be found at: www.morleyfm.com or www.morleyproperty.com
Morley is a business name of Morley Fund Management Limited, registered in England No. 1151805. Registered Office: No. 1 Poultry, London EC2R 8EJ. Authorised and regulated in the UK by the Financial Services Authority and a member of the Investment Management Association.
Morley is also a business name of Morley Fund Services Limited and Morley Pooled Pensions Limited. All are Aviva companies.