Q: What might cause the offer to fall through? What regulatory issues might be at play? What odds would you give the deal going through?
5i Research Answer:
Governments are always sensitive to housing issues, and need to approve the deal. They will look at things like market share of the buyer and other competitors in the regions TCN operates in, as well as whether homeowners/renters may be impacted by the deal. Blackstone could also find material issues upon its due diligence. Financing could be an issue (though we would consider this extremely unlikely). Interest rates could spike higher and change deal economics (unlikely and also a break fee would apply as this would not be reason enough for Blackstone to walk away). While no deal is ever 'done' until the cash is received, we would give odds of deal completion in the 90%+ range.