Blackstone's Joan Solotar on Private Wealth Strategy in Japan

Blackstone's Global Head of Private Wealth, Joan Solotar, discusses the company's strategy in Japan as it aims to reach a $1 trillion goal. She spoke with Bloomberg's Haidi Stroud-Watts and Paul Allen on "Bloomberg: The Asia Trade." The interview provides insight into Blackstone's approach to the Japanese market and its ambitions for growth.

Blackstone Group (NYSE: BX) has recently made waves in the financial world by entering talks with TXNM Energy (NYSE: TXNM), a small, regulated electric utility serving parts of New Mexico and Texas. The deal, which was confirmed on May 19th, involves an all-cash buyout offer at $61.25 per share, representing a significant 20% premium to the unaffected share price [1].

The transaction is expected to close in the second half of 2026, with Blackstone set to buy $400 million of newly issued TXNM shares at $50 apiece. Should the deal fall through, a $350 million break-up fee will be paid. TXNM shareholders are expected to receive a total of $62.88 per share upon completion, including dividends, which implies an 11.5% return over a roughly 1.3-year hold.

The valuation metrics of the deal are notable, with a 12.5X EBITDA multiple and a 22.19X earnings multiple, positioning TXNM at the higher end of electric utility valuation. This is likely due to its smaller size and higher debt-to-asset ratio compared to larger peers. Despite this, the company has a strong track record of reliable performance and dividend increases.

The spread between the current share price and the buyout price is approximately 11%, primarily driven by the time value of money and uncertainty surrounding the deal's closure. Regulatory approval is a key factor, as a similar deal in 2020 with Avangrid was rejected by New Mexico regulators [1]. Additionally, regulators may have reservations about private equity operating a utility due to the perceived inconsistency with long-term, reliable service provision.

Blackstone's strategy in Japan, as discussed in an interview with Bloomberg, aims to reach a $1 trillion goal. Joan Solotar, Blackstone's Global Head of Private Wealth, highlighted the company's approach to the Japanese market and its ambitions for growth [2]. This interview provides insight into Blackstone's broader strategic ambitions and its approach to the Japanese market.

References:
[1] https://seekingalpha.com/article/4790563-blackstone-buying-txnm-energy-arbitrage-opportunity-and-risks
[2] https://www.bloomberg.com/