Merger activity decreased last week with four new deals announced and one deal completed. One of the four deals announced was a potential deal in the works.
American Campus Communities (ACC)
The largest deal announced last week was the acquisition of American Campus Communities (ACC) by Blackstone (BX) for nearly $13 billion. Headquartered in Bee Cave, Texas, American Campus Communities is the largest developer, owner and manager of student housing communities in the United States. ACC became the first publicly-traded student housing company in the country after its IPO in 2004. ACC’s portfolio consists of 166 owned properties in 71 leading university markets including the University of Texas at Austin, the University of California—Berkeley, Arizona State University, and Florida State University, among others.
Blackstone will buy American Campus Communities for $12.8 billion including debt as it bets that rents will continue to rise with colleges reopening in the US and students returning to campus. The deal represents a premium of 30% over the closing stock price of February 16, 2022, the date immediately prior to the company disclosing receipt from Land & Buildings of an indication of willingness to offer to acquire the Company.
ACC also has a ‘Cut-Off’ time until May 28, 2022, during which it can enter into a definitive agreement with other interested parties. According to the Merger Agreement, American Campus will have to pay a termination fee of $278 million to Blackstone if it terminates this agreement. However, if ACC terminates the agreement prior to the ‘Cut-Off’ time, the termination fee will be $139 million. The termination fee to be paid by Blackstone to American Campus, if Blackstone terminates the agreement will be $832 million.