Blackstone Real Estate Income Trust, Inc. entered into a definitive agreement to acquire Resource REIT, Inc. for $2.5 billion.
Upon a termination of the merger agreement, under certain circumstances, REIT will be required to pay a termination fee to BREIT of $80 million. In certain other circumstances, BREIT will be required to pay REIT a reverse termination fee of $258 million upon termination of the merger agreement. BREIT's operating partnership has guaranteed payment of the reverse termination fee and certain expenses. The transaction is subject to customary closing conditions, including the approval of the REIT's common stockholders, BREIT shall have received a written tax opinion to the effect that beginning with its taxable year ended December 31, 2014, and through the merger effective time, REIT has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended. The transaction is not contingent on receipt of financing. The transaction has been unanimously approved by the REIT's Board of Directors. The REIT's Board of Directors recommended the approval of the merger by the holders of REIT common stock and REIT convertible stock. In addition, the holders of at least two-thirds of the outstanding shares of REIT convertible stock entitled to vote on the merger have approved the merger by written consent. On May 16, 2022, Resource REIT held a special meeting of stockholders and approved the merger. The transaction is expected to close in the second quarter of 2022.
Matthew Lustig and Phillip Summers of Lazard Frères & Co. LLC is acting as exclusive financial advisor to the REIT and provided fairness opinion to REIT Board. Robert H. Bergdolt and Kerry E. Johnson of DLA Piper LLP (US) are acting as legal counsel to REIT. BofA Securities, BMO Capital Markets Corp., Eastdil Secured Advisors LLC and RBC Capital Markets LLC are acting as financial advisors to BREIT and Brian Stadler, Matt Rogers and Louis Argentieri, Erik Quarfordt, Rachel Stein, David Rosenberg, Gianna Ceophas and Kristen Lucas, Nancy Mehlman and Ruoxi Zhang, Andrew Blau and Ryan Stott, Timothy Mulvihill and Noreen Lavan and Melanie Jolson of Simpson Thacher & Bartlett LLP are acting as legal counsels. Broadridge Financial Solutions, Inc. (NYSE:BR) acted as the information agent to Resource REIT, Inc. and will receive a fee of approximately $0.45 million for its services. Resource REIT will pay Lazard a transaction fee equal to $15 million, plus an estimated incentive fee equal to approximately $10 million payable upon consummation of the merger (against which the quarterly advisory fees and opinion fee of $2.5 million will be credited).