Blackstone announced on Monday that it will divest about 40% of its stake in Cheniere Energy Inc’s limited partnership to Brookfield Infrastructure and its own affiliated company.
Blackstone (BX) did not disclose the financial terms of the deal. However, according to a Bloomberg report, Brookfield negotiated the terms of the transaction, including a $34.25 per unit sale price that values the deal at $7 billion. The US investment fund’s infrastructure unit matched those terms after performing its own due diligence.
For Blackstone’s public shareholders, the sale is expected to generate distributable earnings of $0.16 per share, including $0.13 a share upon closing expected in the third quarter. Blackstone will gain $5 billion from selling the largest liquefied natural gas export terminal in the US.
Shares in Cherniere (LNG) rose 3.2% to $53.30 at the close on Monday, while Blackstone advanced less than 1% to $53.30.
Blackstone Energy Partners made a $1.5 billion investment in 2012 in Cheniere Energy Partners, which was created by Cheniere Energy Inc. to develop the $25 billion Sabine Pass LNG terminal in Louisiana. That project, which is underpinned by 20-year contracts with major global traders and utilities, shipped its first cargo in February 2016.
BX shares have recouped most of their losses but are still down 4.8% since the beginning of the year. Looking ahead, the average analyst price target of $61.88 indicates 16% upside potential over the coming year.
Meanwhile, Oppenheimer analyst Chris Kotowski last month maintained a Hold rating on the stock, saying that his current valuation framework suggests that the stock is fairly valued.
“We view the stock as an attractive core growth holding, but near-term it is trading at roughly a 15% premium to the S&P, roughly in line with its average last year,” Kotowski wrote in a note to investors.
Overall BX scores a cautiously optimistic Moderate Buy analyst consensus which breaks down into 5 Buys versus 4 Holds. (See Blackstone stock analysis on TipRanks).
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