American Campus Communities stock opened 13% up: here’s why

American Campus Communities Inc (NYSE: ACC) stock jumped 13% on Tuesday after Blackstone Group Inc (NYSE: BX) said it will buy the student housing company for about $12.8 billion, including debt.

Deal translates to $65.47 a share

The agreement translates to $65.47 a share for ACC stockholders. American Campus Communities is the largest developer, owner, and manager of student housing communities in the United States.

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Blackstone’s offer represents a 13.7% premium on the price at which ACC closed the regular session on Monday. The American alternative investment management company plans on taking American Campus Communities private upon completion of the transaction.

The news comes months after Blackstone agreed to buy another real estate investment trust (REIT), Bluerock Residential for $3.60 billion. BX is up roughly 4.0% on Tuesday.

Deal to close in the third quarter of 2022

The all-cash deal is expected to close in Q3 of 2022 if it meets customary closing conditions, including approval from ACC shareholders. In the press release, American Campus Communities’ CEO Bill Bayless said:

This transaction delivers compelling, immediate, and certain value to our shareholders while positioning ACC to further expand our competitive advantage as we continue in our quest to lead the student housing industry to new heights.

The terms and conditions of the agreement also had ACC suspend its quarterly dividend payments, effective immediately. Last week, Rob Sechan said Blackstone was the stock that will benefit from the ongoing market volatility.