IPO could value Blackstone's Brixmor at $4.7 billion

Reuters

By Ilaina Jonas

NEW YORK, Oct 17 (Reuters) - Brixmor Property Group Inc, ashopping center company owned by Blackstone Group LP andBlackstone's first property company to become publicly tradedcould raise more $905.6 million in its intitial public offeringand value the company at more than $4.7 billion, according toregulatory filing on Thursday.

The move paves the way for Blackstone to bring other realestate companies to the public market.

"It is their first property IPO," Green Street Advisorsanalyst Cedrik Lachance said. "When you look at what Blackstoneowns, there are many more property companies that could beexited via the public market. So you want this first IPO to havea certain amount of success."

Brixmor, which first filed for an IPO in July, will beoffering 37.5 million shares, at a range of $19 to $21 per shareaccording to a filing with the U.S. Securities and ExchangeCommission. Including an overallotment of 5.625 million shares,the IPO at the higher end could raise $905.63 million, valuingthe company at $4.73 billion.

Real estate has been the chief driver of Blackstone'sfinancial success, and Jonathan Gray, global head of real estateis seen as a candidate to succeed Chief Executive OfficerStephen Schwarzman.

In the third quarter, real estate accounted for 64.7 percentof Blackstone's economic net income (ENI), the company said onThursday. ENI is a measure of profitability that takes intoaccount the mark-to-market value of its portfolio.

"You can't look at IPOs for us as exits," BlackstonePresident Tony James said during a conference call withjournalists. "You can look at it as the appetizer before themeal."

Blackstone wants the IPO price to be viewed as a bargain inorder to entice buyers, enable the stock to trade well and "beviewed favorably because we're going to be owners for three orfour years after that," James said.

Blackstone has about six of its companies, many of them realestate companies, in various stages of either being sold or inthe IPO process.

In addition to Brixmor, it has filed IPO plans for U.S.hotel operators Hilton Worldwide Inc and budget hotel operatorExtended Stay America. It may sell or IPO budget hotel chain LaQuinta Inns & Suites.

Farther down the road, its warehouse and distribution centercompany IndCorp Properties and single-family homes for rentcompany Invitation Homes also could be slated for IPOs.

Brixmor has 522 shopping centers, about 70 percent of whichare anchored by supermarkets. The portfolio is 92 percentoccupied. The company intends to list on the New York StockExchange under the symbol "BRX".

Bank of America Merrill Lynch, Citigroup, JP Morgan, WellsFargo Securities and Barclays are among the lead underwritersfor the IPO.

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