Outlet stores owned by debt-laden Australia-based Centro Properties Group is acquired by the world’s largest private-equity firm — Blackstone Group for $9.4 billion, according to sources, confirming the reports from the media. Centro owned 588 shopping outlets in the United States, the agreed price of $9.4 billion for the outlet stores would be used by the company to pay at least 60 percent its $16 billion of debt.
Earlier this month, according to a report, Centro Properties received three deals for its U.S retail properties — a partner between Starwood Capitals and Morgan Stanley Real Estate Fund, and of AREA Property Partners and NRDC Equity Partners, and from the private-equity firm Blackstone Group.
Centro manages about A$16.5 billion or $17 billion of outlet stores in the U.S, Australia, and New Zealand, which is also the first Australian casualty of the global economic downturn. The company also planned to sell its Australian outlet stores to reduce debt and restructuring it to a more manageable level.
Centro Properties’ creditors are from large number private equity and hedge funds, and distressed debt specialists. Shares in the company were previously placed in a trading halt ahead of a declaration regarding a potential transaction.
In February 9, 2011, according to sources who could not be named because they are not authorized, Centro narrowed down its bidders to three, including Blackstone for the U.S outlet stores. JP Morgan and UBS are now processing the selling transaction for the shopping outlets.
Most of Centro’s outlet stores in the United States are located in prime neighbourhood, with about 88 percent occupancy rate.