Blackstone Loan Financing to sell assets for €304M

On Thursday, Blackstone (NYSE:BX) Loan Financing Limited (BGLF) announced its entry into a conditional agreement to sell its Profit Participating Notes (PPNs) to an acquisition vehicle owned by Blackstone-affiliated entities. This transaction is set to significantly accelerate the return of capital to shareholders as part of the company's ongoing managed wind-down process, which received overwhelming support from shareholders in September 2023.

The sale of the PPNs, which are issued by Blackstone Corporate Funding DAC and held through a wholly-owned subsidiary, is expected to generate gross proceeds of €304 million. This figure represents a substantial increase over the last reported mark-to-market net asset value (NAV) and aligns with the mark-to-model NAV at the time the wind-down was approved. The transaction will bring the total value to shareholders to approximately €338 million, or €0.808 per share, before transaction and dissolution costs.

This offer to shareholders indicates a premium of 15.8% over the three-month volume-weighted average share price and a 7.8% premium over the closing price as of November 20, 2024. It also reflects a 30.4% premium since the Board's approval of the wind-down in September 2023. However, it represents a discount to the company's latest mark-to-model and mark-to-market NAVs.

The completion of this deal is subject to shareholder approval at a general meeting, with Blackstone-affiliated shareholders agreeing to abstain from the vote. The Board has already received indications of support from major shareholders representing approximately 28% of the voting rights. Following the sale, BGLF plans to distribute a substantial portion of its remaining net assets through a further compulsory redemption of shares and subsequently delist from the London Stock Exchange (LON:LSEG), leading to the company's dissolution.

Steven Wilderspin, Chair of BGLF, emphasized the benefits of the transaction, highlighting immediate liquidity for shareholders, savings on ongoing costs, and an attractive premium on current and historical share prices. The proposal aims to deliver a return of capital greater than 100% compared to the valuation at the time the wind-down was mandated.

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