Why did Bluerock Residential (BRG) stock soar 74% on Monday?

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Highlights

  • Bluerock Residential Growth REIT, Inc. (BRG) has entered into a definitive agreement with Blackstone affiliates.
  • Under the agreement, Blackstone will acquire all outstanding shares of Bluerock’s (BRG) common stock
  • The deal value is US$3.6 billion.

Stocks of Bluerock Residential Growth REIT, Inc. (AMEX: BRG) were trending on Wall Street Monday after the real estate investment trust announced entering a definitive agreement with Blackstone Real Estate affiliates on Dec 20. Under the agreement, Blackstone would acquire all outstanding shares of the common stock of Bluerock (BRG). 

The all-cash deal is worth US$3.6 billion or US$24.25 per BRG share. 

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Bluerock Residential is a REIT firm that aims to increase its long-term stockholder value by acquiring and developing well-located institutional properties across the US.  

The New York-based company has investments in around 60 real estate projects, comprising over 17,900 units. On the other hand, Blackstone, a leading real estate investment firm, operates globally and is headquartered in New York. 

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Under the agreement terms, “Blackstone would buy 30 multifamily properties, comprising around 11,000 units, along with a loan book secured by 24 multifamily assets,” Bluerock said in a statement. The properties are of high quality with sprawling greenery. The properties are in Atlanta, Austin, Orlando, Denver, Phoenix, etc. 

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Stock performance and financial highlights of Bluerock Residential Growth REIT, Inc. (AMEX: BRG) 

The BRG stock traded at US$26.90 at 9:20 am ET on Dec 20, up 74.22% from its previous close. The firm has a market cap of US$406.80 million, a P/E ratio of 140.36, and an EPS of US$0.11. 

 
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The stock saw the highest price of US$16.62 and the lowest price of US$8.80 in the last 52 weeks. Its trading volume on Dec 17 was 2,180,146, up over eight times the average trading volume in the last five days. The stock value jumped 27.81% YTD. 

The company's total revenue was US$53.79 million in Q3, FY21, compared to US$54.58 million in the same quarter of the previous year. Its net income attributable to common shareholders was US$12.54 million, or US$0.45 per diluted share, against a loss of US$17.05 million, or US$0.71 per diluted share in the comparable quarter of the previous year. 
 
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Bottomline

Bluerock plans to spin off its rental business into a single operation before the acquisition. The newly formed real estate investment trust will be named Bluerock Homes Trust, Inc. (BHOM), which would own interests in around 3,400 homes. The Bluerock shareholders will receive BHOM shares.  



 


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