NEW YORK (TheStreet) -- Shares of Blackstone Group (BX) - Get Blackstone Group Inc. Class A Report were increasing in pre-market trading on Wednesday as the New York City-based alternative asset manager is reportedly exploring a $3.6 billion purchase of the German real estate group Officefirst.
Officefirst comprises a portfolio of approximately 100 German office buildings, Reuters reports. The real estate firm is owned by the German financial holding company, IVG.
IVG is currently deciding whether to sell or list Officefirst and has said it will make a decision around mid-September. A sale would allow IVG to divest the entire company at once, while an IPO would only allow IVG to sell an initial stake of approximately half of Officefirst's shares, with the remaining shares auctioned off in subsequent deals, according to Reuters.
Some of the proceeds would be used to pay back Officefirst's debt, sources said, Reuters reports. Private equity groups such as Blackstone are typically more equipped to handle higher debt levels.
Initial reports said property firms Alstria Office, TLG Immobilien and Patrizia Immobilien were interested in Officefirst, but the companies have since backed out, Reuters reports.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate BLACKSTONE GROUP LP as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and premium valuation.
You can view the full analysis from the report here: